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Bayes' Theorem: Uses for Business-related Questions

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Why is using Bayes' theorem important to help answer business-related questions? What does this theorem allow you to do that traditional statistics do not? What are some prerequisites for using Bayesian statistics?

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The expert determines why the use of Bayes' Theorem is important to help answer business-related questions. What the theorem allows which traditional statistics does not. A complete, neat and step-by-step solution is provided in the attached file.

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(a) The simplest version of the theorem states that P(A|B) = P(B|A) * P(A) / P(B)
In words, the probability of A given B is equal to the probability of B given A times the probability of A, divided by the probability of B.
For example, suppose that for a given disease, there is a test that gives accurate positive and negative results 98% of the time; Also, 3% of the ...

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