I understand that the probability of tossing a coin and it landing or either heads or tails is 50% and that flipping it again is an "independent event" and does not change the probability at all. That is, the chances of the coin landing on heads or tails is still 50% regardless of whether it landed on heads or tails the first time.
However, what about something like gasoline prices? Today, gasoline prices can either be up or down (50%). Similarly, tomorrow gasoline prices can either be up or down (50%). But what if gasoline prices were down today and a study of past gasoline price patterns ("empirical probability" from experimenting) demonstrates that if they are down today, they also have been down the following day (60%) of the time--a ten (10%) difference? Is whether gasoline prices were up or down today an "independent event" from whether they will be up or down tomorrow, or a "dependent event"? I'm looking for some definitional clarity here.
2006-07-02
10:49:44
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9 answers
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asked by
brian_hahn_32
3
in
Mathematics