UNIT

• PROBABILITY:
• THEORY OF PROBABILITY, ADDITION AND MULTIPLICATION LAW,
BAYE’S THEOREM PROBABILITY

• PROBABILITY DISTRIBUTION
• CONCEPT AND APPLICATION OF BINOMIAL DISTRIBUTION;
• POISSON DISTRIBUTIONS;
• NORMAL DISTRIBUTIONS
 Theory of Probability

 Probability is the measure of an event that will occur in a

random experiment.
 Probability is measured between 0 to 1 where “0” indicates
impossibility and “1” indicates certainty.
 More close to “1” means that higher the chance of occurring
the events.
 The value of probability can’t be negative.
 Structure of Probability
■ A sample point is a set of elements that represents all the possible outcomes.
– Example: A = {1,2,7,9} and B = {2,3,4,5,6,9}
■ Union: It contains all the elements in the multiple data set but excluding the repetitive elements.
A U B = {1,2,3,4,5,6,7,9}
■ Intersection: It contains the common elements in both or multiple data set.
A ∩ B = {2,9}
■ Types of events
– Two events are mutually exclusive or disjoint if they can’t occur at the same time.
– Two events are independent when the occurrence of one does not affect the probability of
the occurrence of the other.
– The probability that Event A occurs, given that Event B has occurred, is called a conditional
probability. The conditional probability of Event A, given Event B, is denoted by the symbol
P(A|B)
– The complement of an event is the event not occurring. The probability that Event A will not
occur is denoted by P(A').
 Structure of Probability
Independent Event
■ When multiple events occur, if the outcome of one event DOES NOT affect the outcome of the other
events, they are called independent events.
– For example, a die is rolled twice. The outcome of the first roll doesn’t affect the second outcome.
These two are independent events.

– Example 1: A coin is tossed twice. What is the probability of getting two consecutive tails ?

■ Probability of getting a tail in one toss = 1/2

■ The coin is tossed twice. So 1/2 * 1/2 = 1/4 is the answer.

– Example 2: A pack contains 4 blue, 2 red and 3 black pens. If a pen is drawn at random from the
pack, replaced and the process repeated 2 more times, What is the probability of drawing 2 blue
pens and 1 black pen?
Solution
■ Here, total number of pens = 9
■ Probability of drawing 1 blue pen = 4/9
■ Probability of drawing another blue pen = 4/9
■ Probability of drawing 1 black pen = 3/9
■ Probability of drawing 2 blue pens and 1 black pen = 4/9 * 4/9 * 3/9 = 48/729 = 16/243
 Structure of Probability
Dependent Events
■ When two events occur, if the outcome of one event affects the outcome of the other,
they are called dependent events.
Consider the previously mentioned example of drawing a pen from a pack,
with a slight difference.
Example 1:
A pack contains 4 blue, 2 red and 3 black pens. If 2 pens are drawn at
random from the pack, NOT replaced and then another pen is drawn. What is
the probability of drawing 2 blue pens and 1 black pen?
– Solution:
■ Probability of drawing 1 blue pen = 4/9
■ Probability of drawing another blue pen = 3/8
■ Probability of drawing 1 black pen = 3/7
■ Probability of drawing 2 blue pens and 1 black pen = 4/9 * 3/8 * 3/7 = 1/14
 The multiplication laws
■ The general law of multiplication is used to find the joint probability.
■ The probability of intersection of two events (A ∩ B) is called the joint probability.
■ Law of multiplication gives the probability that both event A and event B will occur
at the same time.
■ General Law of Multiplication :- P(A ∩ B) = P(A) P(B|A)
– Example: A bag contains 6 red marbles and 4 black marbles. Two marbles
are drawn without replacement from the bag. What is the probability that both
of the marbles are black?
– Solution:
■ In the beginning, there are 10 marbles in the bag, 4 of which are black. Therefore,
P(A) = 4/10.
■ After the first selection, there are 9 marbles in the bag, 3 of which are black.
Therefore, P(B|A) = 3/9.
■ P(A ∩ B) = (4/10)*(3/9) = 12/90 = 2/15
 The addition laws
■ The general law of addition is used to find the probability of the union of two events, P(A ∪ B).
■ The expression P (A ∪ B) denotes the probability of X occurring or Y occurring or both A and B
occurring.
■ General law of Addition: P(A U B) = P(A) + P(B) - P(A ∩ B) Where A,B are events and (A ∩ B) is the
intersection of A and B.
■ Rule can also be expressed as: P(A U B) = P(A) + P(B) - P(A)P( B | A )

– Example: A student goes to the library. The probability that she checks out (a) a work of fiction is
0.40, (b) a work of non-fiction is 0.30, , and (c) both fiction and non-fiction is 0.20. What is the
probability that the student checks out a work of fiction, non-fiction, or both?
– Solution:
■ P(F U N) = 0.40 + 0.30 - 0.20 = 0.50
– Example: A bag contains 6 red marbles and 4 black marbles. Two marbles are drawn with
replacement from the bag. What is the probability that both of the marbles are black?
– Solution:
■ In the beginning, there are 10 marbles in the bag, 4 of which are black. Therefore, P(A) = 4/10.
■ After the first selection, we replace the selected marble; so there are still 10 marbles in the , 4 of which
are black. Therefore, P(B|A) = 4/10.
■ P(A ∩ B) = (4/10)*(4/10) = 16/100 = 0.16
 Types of Assigning Probability

■ The Classical Method

■ Relative Frequency of Occurrence
■ Subjective Probabilities
 The Classical Method
■ The Classical Method:
– When probabilities are assigned based on laws and rules, the method is
called as the classical method of assigning probabilities.

– Number of outcomes leading to the event divided by the total number of

possible outcomes.

– Each outcome is equally likely happened means there are a finite number
of choices that have equal probability.

– Determine before performing the experiment (a priori)

– Range of possible probabilities: 0 ≤ P(E) ≤ 1

Example: Games of Chance
 The Classical Method
■ Formula:
P(E) = The Number of outcomes in which event occurs (want)
Total number of outcomes (Total)

■ Questions: When you use classical probability, it helps you to find based on
a multiple choice test. Let’s say you have four choices: A, B, C, and D. Each
of these options has an equal chance of being correct, which means you
have a 25% chance of getting the question right.

■ Need of Classical probability:

– It’s a building block for other areas of probability like the counting rule.
– It also extends to more complex situations, like quantum theory, which
shares many important properties with classical probability theory.
Practice Questions
■ A coin is tossed three times. What is the probability that it lands on
heads exactly one time?
■ A card is drawn randomly from a deck of ordinary playing cards. You
win $10 if the card is a spade or an ace. What is the probability that
you will win the game?
Answer keys

■ 1. 3/8
■ 2. There are 52 cards in the deck.
– There are 13 spades, so P(S) = 13/52.
– There are 4 aces, so P(A) = 4/52.
– There is 1 ace that is also a spade, so P(S∩A)=1/52.
– P(S U A) = 13/52 + 4/52 - 1/52 = 16/52 = 4/13
 Relative Frequency of Occurrence

■ The Probability of an event occurring is equal to the number of times the event has
occurred in the past, divided by the total number of opportunities for the event to
have occurred.
■ Relative frequency of occurrence is based on what has happened in the past

■ P(E) = . Number of times an event occurred .

Total number of opportunities for the event to occur
■ Find out the relative frequency of weight of given age group?

Age 15 - 20 21 - 26 - 30 31 - 36 - 41 - 46 - 50
Group 25 35 40 45
Frequency 4 8 4 5 6 3 2
Prob. Of
Relative
Frequency
Cumulative Relative Frequency:

Cumulative relative frequency is the accumulation of the previous relative frequencies.

Example:

(1) A die is tossed 40 times and lands 6 times on the number 4. What is the relative
frequency of observing the die land on the number 4?

(2) A coin is tossed 20 times and lands 15 time on heads. What is the relative frequency
of observing the coin land on heads?
 Subjective Probability

■ The Subjective method of assigning probability is based on the feelings or insights

of the person determining the probability
■ It is based on the person’s intuition or reasoning
■ Subjective probability is the accumulation of knowledge, understanding, experience
stored and processed in the human mind.
■ Subjective probability can be used for unique (single trial) experiments such as
New product introduction, Site selection decision, Sporting Events
■ Example: What is the probability of drawing a king and a queen consecutively
from a deck of 52 cards, without replacement.
– Probability of drawing a king = 4/52 = 1/13
– After drawing one card, the number of cards are 51.
– Probability of drawing a queen = 4/51.
– Now, the probability of drawing a king and queen consecutively is 1/13 *
4/51 = 4/663
Practice Question

■ A bag contains blue and red balls. Two balls are drawn randomly
without replacement. The probability of selecting a blue and then a
red ball is 0.2. The probability of selecting a blue ball in the first draw
is 0.5. What is the probability of drawing a red ball, given that the first
ball drawn was blue? (Ans: 0.4)
■ A die is rolled thrice. What is the probability that the sum of the rolls is
at least 5. (Ans:212/216)
Practice Question: Solution

■ P(R and B) = 0.2

– P(B) = 0.5
– P(R|B) = P(R and B)/P(B) = 0.2/0.5 = 0.4
■ Find all the combinations whose sum equal 4 or less.
– These combinations are (1,1,1) (1,1,2) (1,2,1) (2,1,1)
– Total Combinations being 36*6 = 216
– The probability of getting a sum of 4 or less from the Total
Probability 1.
– Hence, 1 - (4/216) = 212/216
Conditional Probability
■ The conditional probability of (A│B) is the probability that A will occur given B
■ The formula for conditional probability is derived by dividing both sides of the
general law of multiplication by P(B).
■ If A,B are two events, the conditional probability of A occurring given that B is
known or has occurred is expressed as P(A│B).
■ Law of Conditional Probability :- P(A│B) = P (A ∩ B)/ P(B)
 Bayes' Theorem or Bayes’ Rule
■ It was developed by Thomas Bayes.
■ Bayes’ rule is a formula that extends the use of the law of conditional probabilities to
allow revision of original probabilities with new information.
■ Bayes' theorem. Let A1, A2, ... , An be a set of mutually exclusive events that together
form the sample space S. Let B be any event from the same sample space, such that
P(B) > 0. Then,
P(Ak∩B)
P(Ak |B)=
P(A1∩B)+P(A2 ∩B)+...+P(An∩B)

■ The fact that P(Ak ∩B)=P(Ak)P(B|Ak ), Baye's theorem can also be expressed as
P(Ak )P(B|Ak )
P(Ak |B)=
P(A1 )P(B|A1 )+P(A2 )P(B|A2 )+...+P(An )P( B | An )
When to Apply Bayes' Theorem
■ We should consider Bayes' theorem when the following conditions exist.
– The sample space is partitioned into a set of mutually exclusive events { A 1,
A2, . . . , An }.
– Within the sample space, there exists an event B, for which P(B) > 0.
– The analytical goal is to compute a conditional probability of the form: P(A k |
B).
– You know at least one of the two sets of probabilities described below.
■ P(Ak ∩B) for each Ak
■ P(Ak ) and P(B|Ak ) for each Ak
 Bayes Theorem: Problem
■ Marie is getting married tomorrow, at an outdoor ceremony in the desert. In recent years, it has rained only 5 days
each year. Unfortunately, the weatherman has predicted rain for tomorrow. When it actually rains, the weatherman
correctly forecasts rain 90% of the time. When it doesn't rain, he incorrectly forecasts rain 10% of the time. What is
the probability that it will rain on the day of Marie's wedding?
■ Solution: The sample space is defined by two mutually-exclusive events - it rains or it does not rain. Additionally, a
third event occurs when the weatherman predicts rain.
– Event A1. It rains on Marie's wedding.
– Event A2. It does not rain on Marie's wedding
– Event B. The weatherman predicts rain.
■ In terms of probabilities:
– P( A1 ) = 5/365 =0.0136985 [It rains 5 days out of the year.]
– P( A2 ) = 360/365 = 0.9863014 [It does not rain 360 days out of the year.]
– P( B | A1 ) = 0.9 [When it rains, the weatherman predicts rain 90% of the time.]
– P( B | A2 ) = 0.1 [When it does not rain, the weatherman predicts rain 10% of the time.]
– We want to know P( A1 | B ), the probability it will rain on the day of Marie's wedding, given a forecast for rain by
the weatherman
– P( A1 | B ) = . P(A1 )P(B|A1 ). .
P(A1 )P(B|A1 )+P(A2 )P(B|A2 )

– P( A1 | B ) = (0.014)(0.9) / [ (0.014)(0.9) + (0.986)(0.1) ] = 0.111

THANK
YOU