# Bayesian Inference

*Math & Statistics — Finicade finance glossary*

Bayesian inference treats unknown parameters as having probability distributions, starting from a prior and updating to a posterior as data arrives. It produces statements people actually want — 'a 90% chance the parameter lies here' — which frequentist confidence intervals technically do not. The trade-offs are choosing a defensible prior and the computational cost, which is why the approach only became practical with modern sampling methods.

**Also known as:** Bayesian statistics, prior and posterior, Bayesian updating

**Related terms:** [Bayes' Theorem](https://finicade.com/glossary/bayes-theorem), [Conditional Probability](https://finicade.com/glossary/conditional-probability), [Maximum Likelihood Estimation](https://finicade.com/glossary/maximum-likelihood-estimation), [Confidence Interval](https://finicade.com/glossary/confidence-interval), [Monte Carlo Simulation](https://finicade.com/glossary/monte-carlo)

Source: https://finicade.com/glossary/bayesian-inference