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PROBABILITY

By:
Neha Sharma
Priyanka Bharti
Prashant Gupta
Manish Kumar
Probability Basics
 A random variable is an uncertain quantity.

 A outcome is an observed value of a random variable.

 An event is a single outcome or a set of outcomes.

 Mutually exclusive events cannot happen at the same time.

 Exhaustive events include all possible outcomes.

 Independent events refer to events for which the occurrence of


one has no influence on the occurrence of others.

 Events which are not independent, are called dependent.


Probability notation
 P(A) – the prob. of event A occurring

 P(A∪B) – prob. of A or B

 P(A∩B) – prob. of A and B

 P(¬A) – prob. of A not occurring (the


complement of A)
Finite probability
 Experiment that has a finite number of
outcomes.
 Therefore, each event has a finite probability.

 Experiment:
Throw a die. A = number > 4. B = even number.
Find P(A), P(B), P(A∪B) and P(A∩B)
Uniform distributions
 Every outcome in the sample space is
equally probable.

 eg tossing coins
rolling dice
drawing a card from a deck
Joint probability
 P(A,B) is the prob. of having both A and
B.
 Joint probability distributions describe
the probs. of all possible permutations of
events using random variables.
Simple formula
 Probability Of An Event, P(A) =
The Number Of Ways Event A Can Occur
The total number Of Possible Outcomes
Conditional probability
 P(A | B) – the prob. of A happening
given that B has occurred.

P ( A, B ) P ( A  B )
P( A | B)  
P( B) P( B)
Independence
 If events A and B do not influence each
other then:

P(A | B) = P(A)

and

P(A∩B) = P(A)P(B)
Chain rule
P ( A1 , A2 ,  , An ) 

P( A1 ) P( A2 | A1 ) P( A3 | A1 , A2 )  P( An | A1  , An 1 )
Bayes’ theorem

P ( B | A) P ( A)
P( A | B) 
P( B)
Problem 1

 When two six sided dice are tossed, what is the expected value of
the sum of the faces?
Solution
Outcome Sum No. of ways
(1,1) 2 1
(1,2), (2,1) 3 2
(1,3), (2,2), (3,1) 4 3
(1,4), (2,3), (3,2), (4,1) 5 4
(1,5), (2,4), (3,3), (4,2) (5,1) 6 5
(1,6), (2,5), (3,4), (4,3), (5,2), (6,1) 7 6
(2,6), (3,5), (4,4), (5,3), (6,2) 8 5
(3,6), (4,5), (5,4), (6,3) 9 4
(4,6), (5,5), (6,4) 10 3
(5,6), (6,5) 11 2
(6,6) 12 1
36
Solution Cont…

 Expected value of sum

= (1) (2) + (2) (3) + (3) (4) + (4) (5) + (5) (6) + (6) (7) + (5) (8)
+ (4) (9) + (3) 10) + (2) (11) + (1) (12)

36

= (2+6+12+20+30+42+40+36+30+22+12) / 36

= 7
Problem 2
 A fair coin is tossed 5 times. What is the probability that it lands up
tail at least once?

Solution

 Probability of landing head each time =1⁄2

 Probability of getting head all 5 times =(1⁄2)5 =1⁄32

 Probability of getting at least one tail = 1 –1 ⁄32

 = 31⁄32
Problem 3
 There are ten sprinters in the Olympic finals. How many different
ways can the gold, silver, bronze medals be awarded? Assume dead
heat is not possible.

Solution

 Gold can be won in 10 ways

 Silver can be won in 9 ways

 Bronze can be won in 8 ways

 So total no. of ways = 10 x 9 x 8 = 720 ways


Problem 4
 From a group of 6 men and 4 women, a committee of 4 is to be
chosen. What is the probability that the committee consists exactly
of two men and two women?

Solution

 Four people can be chosen in 10C4 ways

 If we want exactly two men and two women, we can choose in 6C2
x 4C2 ways

 probability = 6C2 x 4C2 / 10C4 = (15 X 6) ⁄210

 = 3⁄7
Problem 5
 What is the probability of drawing an Ace or a Spade from a deck of
cards?

Solution

No. of Aces = 4
 No. of Spades = 13

Total no of Aces and Spades = 17

Less: Ace of Spades = 1

 = 16
 Probability = 16C1 / 52C1 =16 ⁄ 52
= 4⁄13
Problem 6
 80% of all tourists who come to India visit Delhi, 70% of them visit
Mumbai and 60% visit both. What is the probability that the tourists
will visit Mumbai or Delhi or both? What is the probability of not
visiting both Mumbai and Delhi?

Solution

10 60 20

Mumbai Delhi
 Required probability = 10 + 60 + 20 = 90%
 = .9
Problem 7

 There are 10 bonds in a portfolio. The probability of


default for each of the bonds over the coming year is 5%.
These probabilities are independent of each other. What is
the probability that exactly one bond defaults?

20
 Required probability
= (10)(.05)(.95)9
= .3151
= 31.51%

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