FULL BOOK Chapters Exercises: Applications 41. A consulting firm submitted a bid
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Question
FULL BOOK Chapters Exercises: Applications 41. A consulting firm submitted a bid for a large research project. The firm's week management initially felt they had a 50-50 chance of getting the project. However, the agency to which the bid was submitted subsequently requested additional information on the bid. Past experience indicates that for 75% of the successful bids and 40% of the unsuccessful bids the agency requested additional information. a. What is the prior probability of the bid being successful (that is, prior to the b. What is the conditional probability of a request for additional information c. Compute the posterior probability that the bid will be successful given a request for additional information)? given that the bid will ultimately be successful? request for additional information. 42. & local bank zeviewed its credst card policy with the intention ofSE Es pproximately 5% MSELFresr recalling some of its credit cards. In the past a cardholders defaulted, leaving the bank unable to collect theExplanation / Answer
Solution:
a) p = 0.5
b) p = 0.75
c) Using Bayes Law it is:
= 0.5*0.75/(0.5*0.75 + 0.5*0.4)
= 15/23
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