The closing price of a company's stock tomorrow can be lower,higher or the same as today's closed.Without any prior information that may affect the price of the stock tomorrow,the probability that it will close higher than today's close is 1/3.This is an example of using which of the following probability approach?
A)A priori probability
B)Empirical probability
C)Subjective probability
D)Conditional probability

Question

Quizplus · Accepted Answer

A priori probability is based on logical deduction rather than observation or personal experience. In this case, the probability of the stock closing higher, lower, or the same tomorrow is equally likely (1/3 each) without any outside information affecting it. Thus, the probability is based on logical deduction rather than observation or personal experience, making it an example of a priori probability.

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