Prepare for Bayes Theorem
Until now we discussed the prior probability of a future event happening and covered the various possibilities. Often we want to know what an event tells us about our circumstances. For example, if our coin keeps on landing on heads, we might suspect that it is weighted.
Before examining that questions, let's look at a simple question. Let's say you know 50% of all your coins are dollars (of any type) and 20% of all your coins are silver dollars. You randomly pick a coin, and - lucky you - its a dollar coin! You don't know if it's silver though.