Test of risk assessment
06 January 2011, 10:39 PM
#31
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The cheese one:
If you use 4 cuts through the cheese on one side of the cube you will have a grid like a noughts & crosses grid i.e. 9 equal squares. You then turn it on its side & cut through what are effectively 9 oblongs,
using 2 cuts equi-distant to make thirds. 9 x 3 = 27
If you use 4 cuts through the cheese on one side of the cube you will have a grid like a noughts & crosses grid i.e. 9 equal squares. You then turn it on its side & cut through what are effectively 9 oblongs,
using 2 cuts equi-distant to make thirds. 9 x 3 = 27
06 January 2011, 10:48 PM
#32
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Here's one.
You have one computer.
You have one internet car based forum.
How many spacktards does it take to answer stupid quizzes?
No cheating, now!
(I don't know the answer - I'll leave it up to you lot)
You have one computer.
You have one internet car based forum.
How many spacktards does it take to answer stupid quizzes?
No cheating, now!
(I don't know the answer - I'll leave it up to you lot)
06 January 2011, 10:50 PM
#34
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How about this one.
You have a pair of old fashioned scales.
You also have a concrete lump weighing 40lbs.
You can break the lump into four pieces.
How heavy does each piece need to be to enable you to use the scales to weigh any weight from 1lb to 40lb (in 1lb increments).
You have a pair of old fashioned scales.
You also have a concrete lump weighing 40lbs.
You can break the lump into four pieces.
How heavy does each piece need to be to enable you to use the scales to weigh any weight from 1lb to 40lb (in 1lb increments).
06 January 2011, 10:56 PM
#35
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07 January 2011, 08:42 AM
#39
07 January 2011, 09:50 AM
#40
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I rationalised it by changing the story to someone fatally shooting 1 in a thousand people, but has a success rate of 95%
he shoots you - what are you chances of survival
i suppose the confusion comes in thinking that a disease with a death rate of 1 in a thousand is your "risk" in dying from the disease
07 January 2011, 10:29 AM
#41
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If the disease kills everyone who catches it, and you're told you have a 95% chance of having it, then there's a 95% chance you'll die. The prevalence of the disease across the general population doesn't matter. But that's NOT what a "95% accurate" test means.
If you take the test and are healthy, there's still a 5% chance that the test will tell you that you have the disease - and that's much more likely then you actually having the disease.
There are four cases to consider:
a) you are healthy, and the test says so. p=0.999*0.95 = 0.94905
b) you are diseased, and the test says so. p=0.001*0.95 = 0.00095
c) you are healthy, but the test is wrong. p=0.999*0.05 = 0.04995
d) you are diseased, but the test is wrong. p=0.001*0.05 = 0.00005
(Sanity check: 0.94905 + 0.00095 + 0.04995 + 0.00005 = 1)
You're told that the test is positive, so you're in (b) or (c). You hope for c, of course, and the chance you're in the b group is 0.00095 / (0.00095+0.04995) = 0.01866, or about 1 in 54.
If you take the test and are healthy, there's still a 5% chance that the test will tell you that you have the disease - and that's much more likely then you actually having the disease.
There are four cases to consider:
a) you are healthy, and the test says so. p=0.999*0.95 = 0.94905
b) you are diseased, and the test says so. p=0.001*0.95 = 0.00095
c) you are healthy, but the test is wrong. p=0.999*0.05 = 0.04995
d) you are diseased, but the test is wrong. p=0.001*0.05 = 0.00005
(Sanity check: 0.94905 + 0.00095 + 0.04995 + 0.00005 = 1)
You're told that the test is positive, so you're in (b) or (c). You hope for c, of course, and the chance you're in the b group is 0.00095 / (0.00095+0.04995) = 0.01866, or about 1 in 54.
Last edited by tony de wonderful; 07 January 2011 at 10:52 AM.
07 January 2011, 10:50 AM
#42
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07 January 2011, 01:35 PM
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I came across this as a simple test of the ability of bankers to assess risk - indeed not just bankers, any typical human!
There is a fatal disease that kills 1 in 1000
A test has been developed that is 95% accurate.
Your doctor tells you that your test is positive.
What are your chances of surviving?
There is a fatal disease that kills 1 in 1000
A test has been developed that is 95% accurate.
Your doctor tells you that your test is positive.
What are your chances of surviving?
07 January 2011, 01:54 PM
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07 January 2011, 01:55 PM
#51
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Basically a positive makes your chances of dying 1 in 50 as opposed to 1 in 1000.
07 January 2011, 02:03 PM
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07 January 2011, 02:07 PM
#56
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It was massively underestimated. I have just been reading about one of the models they used - they calculated that the chance of a 20% fall in property prices, nationally in the US, would only happen as a once in 10 trillion year risk.
Clearly no one actually stepped outside the darkened room and checked their model with reality!!!!
And this was the basis of the modelling used by all banks for pricing CDO portfolios!!!
BTW the same model stated that Black Monday was a slightly higher risk of once in 10 billion year event.
Clearly no one actually stepped outside the darkened room and checked their model with reality!!!!
And this was the basis of the modelling used by all banks for pricing CDO portfolios!!!
BTW the same model stated that Black Monday was a slightly higher risk of once in 10 billion year event.
07 January 2011, 02:28 PM
#57
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for example say lung cancer kils 1 in 1000 people, if you have never smoked your chances are much better than 1 in a thousand
07 January 2011, 02:32 PM
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It was massively underestimated. I have just been reading about one of the models they used - they calculated that the chance of a 20% fall in property prices, nationally in the US, would only happen as a once in 10 trillion year risk.
Clearly no one actually stepped outside the darkened room and checked their model with reality!!!!
And this was the basis of the modelling used by all banks for pricing CDO portfolios!!!
BTW the same model stated that Black Monday was a slightly higher risk of once in 10 billion year event.
Clearly no one actually stepped outside the darkened room and checked their model with reality!!!!
And this was the basis of the modelling used by all banks for pricing CDO portfolios!!!
BTW the same model stated that Black Monday was a slightly higher risk of once in 10 billion year event.
It's a kind of dis-reality I normally associate with extreme insularity.
But otoh the poor risk assessment made a lot of people rich. In a sense it was successful.
