I was looking at the example on using Bayes formula on the Schweser Guide, Book 1, page no 223.
According to the example P (O | I ) = P(IO) / P(I)
Shouldn’t it be P (O | I ) = P(OI) / P(I) ? Or it doesnt make a difference?
I would really appreciate if someone can explain this for me.
Thanks in advance
It makes no difference; they’re the same.
I wrote an article on Bayes’ formula that may be useful: http://financialexamhelp123.com/bayes-formula/.
The Bayes formula is
P (O | I ) = P(I | O)* P(O) / P(I) = P(OI) / P(I)
I would recommend using a tree diagram with these problems and not focus too much on the formula.
Once I did this…these problems were actually very easy.
I agree: see my article, cited three posts above.