A Stockmarket Trader Conducted a Bayesian Analysis of Variations in Skirt

question 3

Multiple Choice

A stockmarket trader conducted a Bayesian analysis of variations in skirt length and stock market growth. He calculated a Bayes factor of 1. Should he use skirt length as a predictor of stock market growth?

• A)Yes, a Bayes factor of 1 suggests that it is worth a small investment in the stock market based on skirt length variations.
• B)No, a Bayes factor of 1 suggests that it is not worth investing in the stock market based on skirt length variations.
• C)No, a Bayes factor of 1 suggests that the data is corrupted.
• D)Yes, a Bayes factor of 1 suggests that it is worth heavily investing in the stock market based on skirt length variations.

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Definitions:

Abstractly

Thinking in a way that is not linked to concrete realities, specific objects, or actual instances, but rather involves conceptual understanding.

Concrete Operational

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.

Analogies

Comparisons made between two things that are otherwise unlike, intended to explain or clarify some unfamiliar or difficult idea or object by associating it with something more familiar.

Mathematical Operations

Basic procedures, including addition, subtraction, multiplication, and division, used in mathematics to calculate and solve problems.