The partner-manager of a franchise of Au Bon Pain, Inc., the French bakery restaurant chain, believes that

Question:

The partner-manager of a franchise of Au Bon Pain, Inc., the French bakery restaurant chain, believes that the average daily revenue of her business may be viewed as a random variable (she adheres to the Bayesian philosophy) with mean $8,500 and standard deviation $1,000. Her prior probability distribution of average daily revenue is normal. A random sample of 35 days reveals a mean daily revenue of $9,210 and a standard deviation of $365. Construct the posterior distribution of average daily revenue. Assume a normal distribution of daily revenues.

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...