Question

Subjective probabilities Group of answer choices are often inaccurate. are seldom used in management decisions. are usually identical to objective probabilities. all of the above.

Answer 1

are often inaccurate.

Explanation:

Subjective probability can be defined as the probability of an event happening based on the opinion, personal judgment, perception or experience of a person.

This ultimately implies that, subjective probabilities are not based evidence, quantitative results, facts, historical or empirical data (informations) and as a result, they are considered to be inaccurate.

Hence, subjective probabilities are often inaccurate.

An example of subjective probability is a financial advisor stating that, there is a 20% chance that the price of a security will increase by next week.