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Empirical, Subjective and Priori Probability

There are three types of probabilities:

Empirical Probability
  • Based on observed or historical data.
Subjective Probability
  • Based on an individual’s judgement about the probability of occurrence of an event.
  • The probability of an event is determined by an individual, based on that person’s past experience, personal opinion, and/or analysis of a particular situation.
Priori Probability
  • Based on prior knowledge.
  • Involves deductive reasoning.

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01
Probability - Basic Terminology
02
Two Defining Properties of Probability
03
Empirical, Subjective and Priori Probability
04
State the Probability of an Event as Odds
05
Unconditional and Conditional Probabilities
06
Multiplication, Addition and Total Probability Rules
07
Joint Probability of Two Events
08
Probability of Atleast One of the Events Occuring
09
Dependent Vs. Independent Events in Probability
10
Joint Probability of a Number of Independent Events
11
Unconditional Probability Using Total Probability Rule
12
Expected Value of Investments
13
Calculating Variance and Standard Deviation of Stock Returns
14
Conditional Expected Values
15
Calculating Covariance and Correlation
16
Expected Value of a Portfolio
17
Variance and Standard Deviation of a Portfolio
18
Bayes’ Theorem
19
Multiplication Rule of Counting
20
Permutation and Combination Formula

Topics

Statistical Methods

Course Downloads

Probability Concepts

Study Notes for Probability Concepts

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