The closing price of a company's stock tomorrow can be lower,higher or the same as today's closing price.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 reasoning rather than empirical evidence or observation. In this case, the probability that the stock will close higher than today's close is based on pure chance and is not influenced by any previous data or information, making it an a priori probability.

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