Probability

Probability

1. Assigning Probability

   • Classic Approach
   • Relative Frequency Approach
   • Subjective Approach

2. Conditional Probability

   • Union of Events
     • A or B or Both occur
       • P(A or B) = P(AuB)
   • Intersection of Events
     • A and B both occur
       • P(AandB) = P(AnB)
   • Complement
     • A does not occur
       • P(A does not occur) = P(A) should be a bar above the A
   • Probability of A occurring after B
     • P(A|B) = P(AnB)/P(B)

3. Rules of Probability

   • Complement Rule
     • P(A) =1 - P(A)
   • Addition Rule
     • P(A OR B) = P(A) + (B) - P(A and B)
     • Addition rule for mutually exclusive events
       • P(A or B) = P(A) + P(B)
   • Multiplication Rule
     • P(A and B) = P(A|B).P(B)
     • Multiplication rule for Independent events
       • P(A and B) = P(A).P(B)