1. General Probability

Description

Actuary (Exam P) Flashcards on General Probability, created by hinal vaghela on 07/09/2017.
hinal vaghela
Flashcards by hinal vaghela, updated more than 1 year ago
hinal vaghela
Created by hinal vaghela almost 7 years ago
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Resource summary

Question Answer
Element Is a possible outcome of an experiment
Event Is a collection of one or more outcomes
Set Is a collection of zero or more elements
Sample Space Is the collection of all possible outcomes
Empty Space Is a set containing zero element
Subset IFF all elements in set D are also in set E
Union Is the set of all elements that are contained in at least one of the sets
Intersection Is the set of elements that are common for each set
Difference Is the the set containing all elements that are in set F but not in set G
Mutually Exclusive Is when two events do not occur at the same time
Disjoint Same as mutually exclusive (when two events do not occur at the same time)
Complement Is the set containing all of the elements in the sample space except the elements that are in T
Pr(anything) Probabilities of anything are only defined between 0 and 1, inclusive
Pr(empty set) Probability of the empty set is always 0
Pr(sample space) Probability of the sample space is always 1
If A1, A2,... are disjoint events then the Pr(Union) is Equal to the sum of the disjoint events
A c B, then The Pr(A) =< Pr(B) Note: for A to be a subset of B, A has to contain an equal or fewer number of elements than B
The Additive Law of Probability Pr(A U B) = Pr(A) + Pr(B) - Pr(A & B) If A and B are mutually exclusive, then Pr(A & B) = 0. Thus, Pr(A U B)= Pr(A) + Pr(B)
The union of the disjoint events must equal the sample space Pr(A U A') = Pr(S) = 1 So, the Pr(A') = 1 - Pr(A) Note: Pr(A') is A complement.
The Law of Total Probability Consider n events, A1, A2,..., An which are disjoint. Pr(A1) + Pr(A2) + ... + Pr(An) = 1. Then A1, A2,..., An is a partition of the sample space, S. Suppose event B exists in S. Then, the Pr(B) = Pr(B & A1) + Pr(B & A2) +...+ Pr(B & An). Because B overlays the sets in the partition, Pr(B) equals the sum of the probabilities of the intersections of B and A1, A2,..., An.
SPECIAL CASE Law of Total Probability When S has only two partitions
De Morgan's Laws 1. The complement of the union of n events is the intersection of the complements of the events 2. The complement of the intersection of n events is the union of the complements of the events
Conditional Probability Is the probability that an event occurs based on a condition, or given that another event has occurred. Notation: the probability that event A occurs given that event B has occurred is Pr(A|B)
Conditional Probability Formula Pr(A & B)/ Pr(A|B) = Pr (B) for Pr(B) not equal to 0 Similarly, the formula for A' given B is, Pr(A' & B)/ Pr(A'|B) = Pr(B) for Pr(B) not equal to 0 From the Law of a Total Probability, Pr(A|B) + Pr(A'|B) = 1
Conditional Probability Independence Formulas Pr(A&B) = Pr(A|B) • Pr(B) Formula conditioned on event A: Pr(B&A) = Pr(B|A) • Pr(A)
The Multiplicative Law of Probability Since Pr(A&B) = Pr(B&A) Pr(A|B) • Pr(B) = Pr(B|A) • Pr(A)
Bayes' Theorem Pr(Ai|B) = [Pr(B|Ai) • Pr(Ai)] / [SUM of Pr(B|Ai) • Pr(Ai)]
Factorial Number of permutations of a set of n instinct elements Formula: n! ORDER MATTERS
Permutations Number of ways to arrange k out of n elements n! / Formula: nPk = (n-k)! ORDER MATTERS
Combination Number of ways to draw k elements out of n distinct elements n! / Formula: nCk = (n-k)!•k! ORDER DOES NOT MATTER
Partition Number of ways to divide n distinct elements into r groups ORDER DOES NOT MATTER (more general than combination) ------------------------- Number of permutations of n non-distinct elements ORDER MATTERS (more general than factorial ------------------------- Formula: n! / k1•k2!•...•kr!
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