[CFA Level I] 23, Probability Conditional Information and Bayes

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: • The distinction between unconditional prior probability and updated conditional posterior probability. • How to apply Bayes formula using total unconditional probability as the normalizing denominator. • A step-by-step small count credit distress screening example. • How to identify and avoid the inverse conditional fallacy on quantitative problems. • A simple decision rule for updating probabilities when new information arrives. This independent prep content helps you master core quantitative techniques for your study plan. Practice online at https://open-exam-prep.com/practice/cfa-level1 and watch video breakdowns at https://www.youtube.com/@Open-exam-prep . Sources checked: October 12, 2026 https://www.cfainstitute.org/programs/cfa-program/candidate-resources/level-i-exam https://www.cfainstitute.org/sites/default/files/2027levelitopicoutline_online.pdf