The closing price of a company's stock tomorrow can be lower, higher or the same as today's closing price. Based on the closing price of the stock collected over the last month, 25% of the days the closing price was higher than previous day's closing price, 45% was lower than previous day's and 30% was the same as previous day's. Based on this information, the probability that tomorrow's closing price will be higher than today's is 25%. This is an example of using which of the following probability approach?
A) empirical classical probability
B) subjective probability
C) a priori classical probability
D) conditional probability

Question

Quizplus · Accepted Answer

The probability is based on historical data collected over the last month, which is an example of empirical classical probability.

The Closing Price of a Company's Stock Tomorrow Can Be