Bayes' theorem

FRM Part 1 Glossary

A rule for updating a probability given new evidence: P(A|B) = P(B|A)·P(A) / P(B). The posterior is proportional to the likelihood times the prior; a common error is flipping the conditioning in the numerator or omitting the total-probability denominator.

Sign up free — get all 99 FRM Part 1 terms, flashcards & rank tracking →

More FRM Part 1 terms

KomFi Academy — Stop doomscrolling. Get KomFi.

Build your intelligence, anytime, anywhere.

KomFi Academy is a curated training platform with 40,000+ practice questions, 18,000+ flashcards, on-demand video lectures, podcasts, and 4K slide decks across the topics serious professionals study: GMAT, LSAT, MCAT, Investment Banking, Private Equity (LBOs & PE math), Private Credit, Quantitative Finance, Financial Accounting, Asset- Backed Securities, Volume Profile Analysis, Order Flow Trading, Market Microstructure, Volume Spread Analysis, Elliott Wave Theory, Volume-Price Analysis, and Public Offering Frameworks.

What's inside

Topics

View pricing · Read testimonials