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Strike It Rich Is a Gold Mining Company That Is

question 27

Essay

Strike It Rich is a gold mining company that is attempting to decide whether to invest in a particular site.The probability that the site has gold is 0.50.In order to obtain more information about the potential presence of gold,the company has hired a geologist to analyze the soil.Past history indicates that there is a 60% chance that the geologist's test is positive given the presence of gold and a 35% chance that the test is positive given the absence of any gold.What is the probability of the presence of gold given that the geologist's test yielded a positive result? Use Bayes' theorem to compute this posterior probability.


Definitions:

Probabilities

Numerical values ranging from 0 to 1, representing the likelihood of occurrence of a specific event or outcome.

Sample Points

Individual units or observations collected from the sample, each of which represents a data point.

Department Store

A large retail store offering a wide variety of products and departments under one roof.

Merchandise

Products or goods that are bought, sold, and traded in the market, often referred to in retail contexts.

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