Bayes' theorem can be used in many applications, such as medicine, finance and economics. In finance, Bayes' theorem can be used to update a previous belief once new information is obtained. For instance, suppose you believed the stock market had a 50% chance of going down over the next year. You can update this prior probability if you get new information regarding interest rates, GDP or unemployment, to obtain a posterior probability.
Investment dictionary. Academic. 2012.
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