“Label each of the following as an empirical, a priori, or subjective probability. A. The probability that U.S. stock returns exceed long-term corporate bond returns over a 10-year period, based on Ibbotson Associates data. B. An updated (posterior) probability of an event arrived at using Bayes’ formula and the perceived prior probability of the event. C. The probability of a particular outcome when exactly 12 equally likely possible outcomes exist. D. A historical probability of default for double-B rated bonds, adjusted to reflect your perceptions of changes in the quality of double-B rated issuance.”
Give it a go and we will help you out.
A. subjective, because it is based on an individual’s data.
B. A priori, because it is based on an inspection (probably) and then updated. (Not sure, if that is a correct reason…it looks weird)
C. Empirical, because it says the prob is 1/12, which is a calcn based on so many experiments of the past
D. Subjective (specific to a person)
How to determine a priori?
A. Empirical
B. Subjective
C. A priori
D. Subjective
It would be great if you could support your answer with an explanation. I am not sure about the answers. I’ll have to check them up, just in case you gave away the answers to check if you are correct 
A it’s based on past 10 years data and the empirical probability is determined by analysing past data.
B. I am not sure but it should be subjective since it seems to be based on personal judgement.
C. A priori bacause because reasoning is involved.
D. since it involves personal perception of changes in the quality it seems its a subjective probability.
okay. I will have to check up for the answers. Can someone explain this please? PASSEDTENSE?
S2000MAGICIAN?