Bayes' formula

CFA Level III
#1

http://www.youtube.com/watch?v=pPTLK5hFGnQ&list=FLrqSdJBKBN-9mS4H7tyBhKA&index=41&feature=plpp_video

I found this video on youtube. It’s a short video on Bayes’ Formula. Enjoy it.

#2

Hi Tulkuu,

Thanks for sharing. That was helpful.

P

#3

I still do not know why behavioural finance mention Bayes’ Formula. Anyone can help? Why does Formula affect people behaviour?

#4

The Rational Economic Man ( Homo Economicus) uses it all the time . For the most part actual people do not use it because it is too complicated to evaluate in practice and there data input is never fully available to estimate the probabilities leave alone the expected returns.