# Conditional Probability

*Math & Statistics — Finicade finance glossary*

Conditional probability is the chance of an event given that another has occurred, written P(A|B). Almost every real forecast is conditional — the odds of default given a recession, of a rally given an earnings beat. The universal error is treating P(A|B) as if it equalled P(B|A): the probability that a fraudster fails an audit is nothing like the probability that someone failing an audit is a fraudster.

**Also known as:** probability given, conditional distribution

**Related terms:** [Bayes' Theorem](https://finicade.com/glossary/bayes-theorem), [Probability](https://finicade.com/glossary/probability), [Expected Value](https://finicade.com/glossary/expected-value), [Correlation](https://finicade.com/glossary/correlation), [Random Variable](https://finicade.com/glossary/random-variable)

**Taught in:** Stat Dojo — Conditional Probability

Source: https://finicade.com/glossary/conditional-probability