Using the Data Below, Which of the Following Would Be

question 12

Multiple Choice

Using the data below, which of the following would be the posterior probabilities, P(S_j | U) ? ?
? $$\begin{array} { c c c } \begin{array} { c } \text { States of Nature } \\( s j ) \end{array} & \begin{array} { c } \text { Prior } \\\text { Probabilities } \\P ( s j ) \end{array} & \begin{array} { c } \text { Conditional } \\\text { Probabilities } \\P ( U \mid s j ) \end{array} \\\hline s 1 & 0.65 & 0.75 \\s 2 & 0.20 & 0.35 \\s 3 & 0.15 & 0.20 \\\hline \text { Total } & 1.00 & \\\hline\end{array}$$ ?

• A)0.83, 0.12, and 0.05
• B)0.49, 0.07, and 0.03
• C)0.47, 0.49, and 0.04
• D)1.00, 0.59, and 1.00

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Definitions:

Estimated Bad Debts

The portion of accounts receivable that a company does not expect to collect.

Carrying Amount

The recorded cost of an asset in a company's financial statements, less any accumulated depreciation or amortization.

Allowance for Doubtful Accounts

A contra-asset account used to reduce accounts receivable to its net realizable value by estimating uncollectible debts.

Bad Debts Expense

An expense recognized when it is probable that receivables will not be collected and is considered a cost of doing business on credit.