Class 2 | 27th August 2024
Table of Contents
Unit 1 – Probability Concepts................................................................................................... 2
Notation and Terminology.................................................................................................... 2
Examples............................................................................................................................. 2
Random Experiment............................................................................................................ 3
Sample space....................................................................................................................... 3
Complement Rule................................................................................................................ 3
Mutually Exclusive Events.................................................................................................... 4
Collectively Exhaustive Events............................................................................................. 4
Diagram for Combined Concepts.........................................................................................4
Collectively Exhaustive AND Mutually Exclusive...............................................................4
Collectively Exhaustive BUT NOT Mutually Exclusive........................................................4
Three Approaches to Probability............................................................................................. 4
Joint, Marginal and Conditional Probability...........................................................................5
Contingency Table............................................................................................................... 5
Conditional probability......................................................................................................... 6
Independence...................................................................................................................... 6
Union of Events....................................................................................................................... 7
Multiplication Rule................................................................................................................... 7
Example............................................................................................................................... 7
Bayes’ Theorem...................................................................................................................... 8
Class 2 | 27th August 2024
Unit 1 – Probability Concepts
Probability concept through a deck of cards.
52 total cards.
13 of each nature.
o Hearts
o Clubs
o Spade
o Diamond.
12 face cards.
10 of numbers (A to 10)
Notation and Terminology
P (k) Probability of K.
P (K | L) probability of K given L.
Experiment – any well-defined action, e.g., tossing a coin.
Outcome – the result of experimenting e.g., heads or tails
Random variable – an expression whose value is the outcome of an experiment.
Sample space – the set of all possible experiment outcomes.
Event – the set of outcomes with a given characteristic or attribute.
Collectively exhaustive – covers everything.
Mutually exclusive – belongs to one group.
Examples
Drawing one card from the deck
a. Probability of King 4/52
b. Probability of a Queen 4/52
c. Probability of getting a king and Queen 0/52 (No possibility as there is no such
card here).
d. King or Queen 8/52
e. Probability of a Heart 13/52
f. Probability of a Queen 4/52
g. Probability of Queen or a Heart 16/52
h. Probability of pulling a king given the population is face cards only? 4/12
Example 2
70% have Windows.
40% have a MAC.
20% have both.
Q: The student has a Windows computer; what's
the probability he also has a MAC?
P(M | W) Probability of Mac given windows
20/70
Example 3
Pass rate of a first-time taker for the bar exam is 70%
The students can test one more time, and given it is the second time, the pass rate is
80%
Class 2 | 27th August 2024
Random Experiment
An experiment is a procedure that is:
Carried out under controlled conditions and
Executed to discover an unknown result.
An experiment that results in different outcomes when repeated in the same manner every
time is a random experiment.
Experiment Outcomes
Flip a coin Heads, Tails
Exam Marks Numbers: 0, 1, 2, ..., 100
Assembly Time t > 0 seconds
Course Grades F, D, C, B, A
Sample space
A list of exhaustive and mutually exclusive outcomes is called a sample space
denoted by S.
The probability is between 0 and 1.
Sum of probabilities is equal to 1.
S discrete; a finite and countable finite set of outcomes.
S continuous; contains intervals of real numbers.
Complement Rule
The complement rule is the probability of event
A is when A does not occur.
o It gives us the not occurring circumstances.
P(AC)= 1 – P(A)
P(A)=1-P(Ac)
Mutually Exclusive Events
Events A and B are mutually exclusive or disjoint their
intersection is the null set that contains no element.
Collectively Exhaustive Events
In probability theory and logic, a set of events is jointly or collectively exhaustive if at least
one of the events must occur. For example, when rolling a six-sided die, the events 1, 2, 3,
4, 5, and 6 balls of a single outcome are collectively exhaustive because they encompass
the entire range of possible outcomes.
Diagram for Combined Concepts
Class 2 | 27th August 2024
Collectively Exhaustive AND Mutually Exclusive
When applied to information, mutually exclusive ideas would be distinctly separate and not
overlapping. Second, “collectively exhaustive” means that the set of ideas is inclusive of all
possible options. Going back to the six-sided dice example, the set {1,2,3,4,5,6} is mutually
exclusive AND collectively exhaustive.
Collectively Exhaustive BUT NOT Mutually Exclusive
A set of events are collectively exhaustive if at least one must occur. O C. A set of events
are mutually exclusive if they cannot happen simultaneously. A set of events are collectively
exhaustive if the probability of each event in the set is not affected by the outcomes of the
other events.
Three Approaches to Probability
Three approaches to probability:
1. Classical good when there are equally likely outcomes. Deck of cards and pulling
one card; Rolling a 5 when you roll a die
2. Relative Frequency Law of large number. As the number of times that an
experiment is repeated increases, the relative frequency (proportion) of a particular
outcome tends to approach the probability of the outcome.
3. Subjective
Joint, Marginal and Conditional Probability
Condition Definition Diagram
Joint A statistical measure that
calculates the likelihood of
two events occurring
together and at the same
point in time.
Marginal The marginal probability is
the probability of a single
event occurring
independently of others.
Conditional The probability that an
event occurs given that
another specific event has
already occurred.
Class 2 | 27th August 2024
Contingency Table
Marginal Probability of a single event is found by dividing a row or column total
by the total sample size.
o P(S2) =33/67 = 0.4925
o P(T2) =19/67
o P(T1) =16/67
Joint Probability intersection of two events in a cross-tabulation table.
o Joint event: Low Tuition and Large Salary Gains; denoted by P (T 1 ꓵ S3)
o P 1/67 =0.0149
Conditional Probability is found by restricting it to a single row or column, i.e.,
the condition.
o Probability (S1 | T3)= 5/32
Conditional probability
The conditional probability is used to determine how two events are related; that is we can
determine the probability of one event given the occurrence of another related event.
Notation
P(A|B) read as the probability of A given B;
Formula
Class 2 | 27th August 2024
P ( A∧B )
P(B|A) =
P( A )
P ( A∧B )
P(A|B) =
P ( B)
The “given” event is always the denominator.
Independence
Conditional probability lets us know if two events are related.
If the probability is not affected by the occurrence of another event, then those events are
independent.
Two events A and B are independent if P(A|B) = P(A), P(B|A) =P(B)
Seat Belt Survived Died Total
Yes 412,368 510 412,878
No 162,527 1,601 164,128
Total 574,895 2,111 577,006
P(D) 0.4%
P(D|SY) 0.1%
P(D|SN) 1.0%
Union of Events
P(A ∪ B ∪ C) = P(A) + P(B) + P(C) – P(A ꓵ B) - P(A ꓵ C) - P(B ꓵ C) + P(A ꓵ B ꓵ C)
Multiplication Rule
Used to calculate the joint probability of two events. Based on the conditional
probability formula:
o P(A|B) =P (A and B)/P(B)
Class 2 | 27th August 2024
o Where, P (A and B) = P (B | A) * P(A)
* If A and B are independent events, then P (A and B) is P(A) * P(B)
Example
A course has 7 male students and 3 female students. The professor allows a student
to answer only 1 question. What is the probability that two students chosen are
female?
o 3/10 * 2/9
Given the condition is no longer there i.e. The professor allows a student to answer
only 1 question is not applicable.
o Probability would 3/10 * 3/10
Bayes’ Theorem
We begin probability analysis with initial or prior probabilities.
Then, from a sample, special report, or product, we obtain additional information.
We then calculate revised or posterior probabilities
Bayes’ Theorem is basically revising the prior probabilities.
Formula
Class 2 | 27th August 2024
Example 1
Better way to solve it:
Supplier Purchased Defected
Crawford 50% 4%
Hall 30% 3%
Schuller 20% 5%
30% Hall – 300
50% - Crawford - 500 9
20
10
20% Schuller - 200
P(S|Defected) 10 are defected in the total pool if from schuller.
total defected all across are 39 units.
Therefore, the probability is 10/39 = 0.256
Example 2
Class 2 | 27th August 2024
Positive test result Negative test result
Actually pregnant 96% 4%
Not pregnant 1% 99%
Formulas
P(A or B)=P(A)+P(B)-P(A and B)
P(A and B)
A ꓵ B A and B
A ∪ B A or B
