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YouTube T2-9c Bayes Theorem, Three-state variable

Nicole Seaman

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This explores the answer to Miller's sample question in Chapter 6 of http://amzn.to/2C88m0i. There are three types of managers: Out-performers (MO), in-line performers (MI) and under-performers (MU). The prior probability that a manager is an outperformer is 20.0%. But if we observe two years of market beating performance, (aka, evidence), then what is the posterior (updated) probability that the manager is an outperfomer?

Here is David's XLS: http://trtl.bz/010118-bayes-three-states

 
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