Use Bayes' Theorem to Find the Indicated Probability

question 15

Multiple Choice

Use Bayes' theorem to find the indicated probability.
-Shameel has a flight to catch on Monday morning. His father will give him a ride to the airport. If it rains, the traffic will be bad and the probability that he will miss his flight is 0.06. If it doesn't rain, The probability that he will miss his flight is 0.02. The probability that it will rain on Monday is 0.29.
Suppose that Shameel misses his flight. What is the probability that it was raining?

• A) 0.29
• B) 0.551
• C) 0.449
• D) 0.06

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.

Extraordinary Gain

Income from events that are both unusual in nature and infrequent in occurrence, excluded from regular business operations when assessing profitability.

Note Receivable

A financial claim against another party that is evidenced by a written promise to pay a specified sum of money on demand or at a set time.

Impairment

A decrease in the recoverable value of an asset below its carrying amount on the balance sheet, leading to an adjustment of the book value.