@Dsorgnzd:
Here is a similar problem: The cowboy turns his back and the gambler lays out the three cards on a table. He peaks under each card and knows the colors that are face down. The cowboy turns around and is asked to select the card with the opposite color on the reverse. The cowboy points at the card he guesses is oppositely colored, say #1. His odds in winning are 1 in 3. The gambler picks another card, say #3, and flips it over, showing that it has the same color on both sides. The gambler now gives the cowboy the option of switching his selection to card #2, or staying pat with his original selection of card #1.
The question: What now are the cowboys odds of winning if he stays with his original selection of card #1? What are the cowboys odds of winning if he switches to card #2? Explain your reasoning.
Bayesian statistics are a large component of financial analysis algorithms. Those who are knowledgeable in Bayesian statistics and graduate from a prestigious GSB school can almost write their six-figure ticket to a firm on Wall Street.
Jon Corzine graduated in my class in 1975. He was a whiz in Bayesian statistics. Too much of a whiz in other things as it worked out.