Module 5

Module V: Probability Theory

• Basic concepts in probability - Statistical dependence and

independence, Bayes theorem, Sample space and Events, Simple
and Compound Events, Probability and Probability Distributions:
Normal Distribution, Binomial and Poisson distribution
Introduction
• The first attempt to quantify probability was by Galileo, who helped a Duke
understand why certain totals (like 9 or 10) appeared more often when
rolling three dice, even though they had the same number of combinations.
• Galileo's work led to the idea that even when two outcomes have an equal
number of combinations, some might still be more likely based on all possible
ways to get those outcomes.
• Later, Pascal and Fermat, two mathematicians, formalized probability as a
mathematical theory due to a gambling dispute.
• Other mathematicians like Bernoulli, and Laplace built on this foundation.
• Thomas Bayes later introduced a way to adjust probabilities based on new
information, known as Bayes’ theorem.
• Today, probability is a key part of statistics, used globally.
Meaning of Probability
• Probability refers to the measure of how likely an event is to
occur. It is quantified as a number between 0 and 1, where:
• 0 indicates that the event will not happen (impossible event).
• 1 indicates that the event will certainly happen (certain event).
• Any value between 0 and 1 reflects uncertainty, with higher values
indicating a higher likelihood of the event.
• In essence, probability provides a numerical representation of
uncertainty, helping us make informed decisions based on the
likelihood of various outcomes.
Examples of Probability in Daily Life:
• Weather forecasting: A weather report might say there's a 70%
chance of rain, reflecting the probability of rain occurring based on
meteorological data.
• Games of chance:. Probability is essential in games involving random
outcomes, such as coin flipping. For a fair coin, there are two equally
likely outcomes: heads or tails.
• Thus, the probability of getting heads (or tails) is 1/2 ​ or 50%. This
principle extends to dice rolls, card games, and other chance-based
games, forming the basis of strategies and expected outcomes.
• Risk assessment: Insurance companies use probability to estimate the
risk of events like accidents or health issues when pricing policies.
Importance of Probability
1.Decision Making Under Uncertainty
2.Risk Management
3.Forecasting and Predictions
4.Scientific Research
5.Understanding Randomness
6.Optimizing Business Operations
7.Legal and Forensic Applications
Terminologies
Deterministic and nondeterministic
experiments
Deterministic Experiments
• In deterministic experiments, the outcome is always predictable and
certain. Given the initial conditions, the same outcome will occur every
time the experiment is performed. There is no randomness involved,
and the result is determined by known laws or rules.
Examples of Deterministic Experiments:
• Physics experiments: Dropping an object from a certain height in a
vacuum will always result in the object falling at a predictable speed
due to gravity.
• Mathematical calculations: Adding 2 + 3 will always result in 5.
Nondeterministic (or Stochastic) Experiments
• In nondeterministic experiments, also known as stochastic
experiments, the outcome is not predictable with certainty. Even
with the same initial conditions, the result can vary due to the
involvement of chance or random factors. The outcome is governed
by probabilities rather than fixed laws.
Examples of Nondeterministic Experiments:
• Tossing a coin
• Rolling a die
• Weather forecasting etc
Trial
• A trial refers to performing an experiment or action one time to
observe the possible outcomes. It is essentially a single execution
of the experiment. Each time an experiment is conducted, it's
called a trial.
Example:
• Tossing a coin once is a trial. You perform the action of tossing the
coin and observe whether it lands on heads or tails.
• Rolling a die once is a trial. You roll the die and observe the
number that comes up.
Event
• An event is a set of outcomes (or a single outcome) of an experiment. It
can include one or more outcomes from the sample space. Events are
often described in terms of probability, such as the chance of a
particular event happening.
Example:
• Tossing a coin: If you toss a coin once, the possible events are:
• Event 1: The coin lands on heads.
• Event 2: The coin lands on tails.
• Rolling a die: When rolling a six-sided die, possible events include:
• Event 1: The die shows an even number (outcomes 2, 4, or 6).
• Event 2: The die shows a number greater than 4 (outcomes 5 or 6).
Mutually Exclusive Events
• Two events are said to be mutually exclusive events if the
occurrence of one event implies no possibility of occurrence of the
other event.
• For example, in throwing an unbiased dice, the occurrence of the
number at the top prevents the occurrence of other numbers on it.
• These are events that cannot happen at the same time.
• If one event occurs, the others cannot.
• Mutually Exclusive Events (also called disjoint events) are events
that cannot occur at the same time.
Collectively Exhaustive Events
• Collectively Exhaustive Events, set of events in a sample space such
that one of them compulsorily occurs while performing the experiment.
• They are also known as jointly exhaustive events
• Events cover all possible outcomes, so one of them must happen.
• Example: When flipping a coin, the events "heads" and "tails" are
collectively exhaustive because they cover all possible outcomes for a
coin flip.
• Implication: If events 𝐴 and 𝐵 are collectively exhaustive, then:
𝑃(𝐴 U 𝐵)=1
• This means the probability that one of the events will occur is 100%.
Mutually Exclusive and Collectively
Exhaustive Together
• Sometimes, a set of events can be both mutually exclusive and
collectively exhaustive.
• Example: In a single roll of a die, the events of rolling a "1", "2", "3",
"4", "5", or "6" are mutually exclusive (you can't roll two numbers
at once) and collectively exhaustive (one of these outcomes must
occur).
Equally Likely Events
• When all the possible outcomes of an experiment have an equal
probability of occurance, such events are called equally likely
events.
• For example, in case of throwing of a fair coin, we have already
seen that
• P(Head) = P (Tail) = 0.5
Independent Events
• Definition: Two events are independent if the occurrence or non-
occurrence of one event does not affect the probability of the other
event.

• Characteristics:
• The outcome of one event provides no information about the other.
• Common in scenarios where the events happen in separate contexts.
2. Dependent Events
• Definition: Two events are dependent if the occurrence of one event
affects the probability of the other event.

Characteristics:
• The outcome of one event influences the probability of the other.
• Common in scenarios where the events are related or occur
sequentially.
Approaches to Probability
1. Classical Approach (A Priori
Probability)
Classical (or Theoretical) Approach:
• This approach assumes that all outcomes of an experiment
are equally likely.
• Probability is calculated as the ratio of the number of
favorable outcomes to the total number of possible outcomes.
• It’s commonly applied in scenarios like tossing coins or
rolling dice, where outcomes are assumed to have equal
chances.
2. Relative Frequency Approach
• In Frequentist (or Empirical) Approach,Probability is
determined by looking at how often an event occurs in
the past.
• This approach is useful when you have data from many
repeated experiments or observations.
• probability is defined as the relative frequency of an event
occurring after repeating an experiment many times
Formula
3.Axiomatic Approach
• Proposed by Andrey Kolmogorov, this approach builds probability
theory from a set of fundamental axioms.
• It doesn’t rely on how probability is derived (classical, empirical,
or subjective) but instead defines it through axioms, providing a
formal framework for probability theory that is universally
applicable.
4. Subjective Approach
• Probability is based on personal judgment or opinion when
there’s no data or past experience to rely on. It is a personal
estimate based on available information.
• This approach views probability as a measure of a person’s belief
in the likelihood of an event occurring, based on available
information or personal judgment rather than empirical data.
• Subjective probability is often used in fields like finance and
economics, where outcomes are uncertain and expert judgment is
crucial.
• Example:
• If a group of experts is asked about the probability of a
nuclear accident, they might use their expertise and
judgment to assign a subjective probability based on
factors they know, even though there is no exact data.
• Limitation: It can vary from person to person since it is
based on opinions and may not always be reliable.
Problems
Probability with Balls in a Bag
Probability with Tossing 3 Coins
Probability with a Die
Addition Theorem on Probability
• When we're interested in knowing the probability of either event
A, event B, or both happening, the Addition Theorem is essential.
• It helps us avoid counting situations where both events occur
more than once
• The ultimate goal is to accurately calculate the probability of one
or more events happening, whether they are independent,
mutually exclusive, or overlapping.
• By using the Addition Theorem, you ensure you’re accounting for
all scenarios without over-counting overlapping cases.
When to Use the Addition Theorem
Basic Form of the Addition Theorem
Example 1: Tossing a Die
Special Case: Mutually Exclusive Events
• If events A and B are mutually exclusive, they cannot happen at
the same time. This means P(A∩B)=0.
• In this case, the formula simplifies to:
Example 2: Drawing Cards from a Deck
Card Probability
Lottery Ticket Probability
Die Roll Probability
 Questions
• A card is drawn from a standard deck of 52 cards. What is the
probability of drawing either a heart or a face card?
Questions
• In a class of 50 students, 20 students study mathematics, 15 study
physics, and 10 study both subjects. What is the probability that a
randomly chosen student studies either mathematics or physics?
Answer
Question
• In a company, 60% of employees are skilled, 40% are experienced,
and 25% are both skilled and experienced. What is the probability
of selecting an employee who is either skilled or experienced?
Answer
Question
• A fruit basket contains 5 apples, 4 oranges, and 3 bananas. If one
fruit is randomly picked, what is the probability that it is either an
apple or a banana?
Answer
Multiplication Law of Probability
When to use multiplication theorem?
Question
Question
Question
Question
Question
Question
Question
Classical or Mathematical Probability
Question 1
• Chartered Accountant applies for a job in two firms X and Y. He
estimates that the probability of his being selected in firm X is 0·7,
and being rejected at Y is 0·5 and the probability of at least one of
his applications being rejected is 0·6. What is the probability that
he will be selected in one of the two firms ?
Question 2
• Probability that a man will be alive 25 years hence is 0·3 and the
probability that his wife will be alive 25 years hence is 0·4. Find
the probability that 25 years hence
(i) both will be alive,
(ii) only the man will be alive,
(iii) only the woman will be alive,
(iv) none will be alive.
(v) at least one of them will be alive.
Answer
Bayes' Theorem
Bayes' Theorem
• Bayes' Theorem is a fundamental concept in probability theory
that describes how to update the probability of an event based on
new evidence.
• It is named after Thomas Bayes, an 18th-century statistician.
• The theorem is useful in situations where we want to revise an
initial belief (prior probability) about an event in light of new
information (likelihood), to get a more accurate updated belief
(posterior probability).
 Example

This example shows how Bayes' Theorem can be used to

update our beliefs based on new evidence
Question

• In a class of 30 students, 18 are males and 12 are females. 60% of

the males and 40% of the females passed an exam. If a randomly
selected student passed the exam, what is the probability that the
student is male?
Question
• A shipment consists of 500 items, 200 of which are defective. If
you randomly select one item and find that it is defective, what is
the probability that it came from supplier A, if you know that 60%
of the items came from supplier A and 10% of supplier A's items
are defective?
Question
• In a family with two children, what is the probability that both
children are boys, given that at least one of them is a boy?
Question
• A fair coin is tossed three times. What is the probability of getting
exactly two heads, given that the total number of heads is at least
one?
 Question
• A box contains 5 red balls and 3 green balls. If two balls are picked
randomly and the first one is red, what is the probability that the
second one is also red?
Question
• The probability that a driver will run a red light is 0.1, and the
probability of an accident occurring when a driver runs a red light
is 0.05. What is the probability that an accident occurs, given that a
driver ran a red light?
Question
• What is the probability that a randomly chosen year (not necessarily a
leap year) has 53 Fridays?
Question
Question
• Three unbiased coins are tossed simultaneously. Find the
probability of getting:
(i) At least two heads.
(ii) At most two heads. ("At most two heads" means that the
outcome can be 0, 1, or 2 heads)
(iii) All heads.
(iv) Exactly one head.
(v) Exactly one tail.
Answer
Question
• A box contains 4 blue, 5 green, and 6 yellow balls. Three balls are
drawn at random. Find the probability that:
1.Two are green and one is yellow.
2.All three are blue.
3.One ball of each color is drawn.
Question
• A fair die is thrown. Find the probability of getting:
(i) A prime number.
(ii) An even number.
(iii) A number multiple of 2 or 3.
(iv) A number multiple of 2 and 3.
(v) A number greater than 4.
Answer
Binomial, Poisson and
Normal distribution
Random Variable
• A random variable represents the outcome of a random event. Think
of it as a container that holds the possible results of a random
experiment.
1. Discrete Random Variable
• Takes specific, countable values (like 0, 1, 2).
• You can "list" the outcomes.
Example: Tossing 2 coins.
• Possible outcomes of the toss: HH, HT, TH, TT.
• Define X = number of heads. Then, X can take values 0, 1, or 2.
• 0 heads: TT (Probability = 1/4 = 0.25).
• 1 head: HT, TH (Probability = 2/4 = 0.50).
• 2 heads: HH (Probability = 1/4 = 0.25).
• Thus, X={0,1,2} with corresponding probabilities.
Continuous Random Variable
• Takes an infinite range of values within an interval.
• Values can be decimals.
• Example: Temperature in a city.
• Temperature can vary between 30°C and 45°C, but the exact
temperature might be 32.567°C or 44.999°C.
• The range is infinite because we can keep dividing the interval into
smaller parts.
What is a Probability Distribution?
• A probability distribution connects the values of a random variable to
their likelihood of occurrence.
Intuitive Explanation:
• Imagine rolling a fair die:
• Possible outcomes = {1, 2, 3, 4, 5, 6}.
• Each outcome has an equal chance of 1/6
This is the probability distribution for the die roll.
• In more complex scenarios, like tossing coins or measuring
temperature, the probabilities may not be equal. The probability
distribution helps us calculate these probabilities.
Binomial Distribution
• This applies when we’re looking for the number of "successes" in a
fixed number of trials.
• Each trial is independent.
• Probability of success (P) remains constant.
Tossing a Coin 2 Times
• We are tossing a fair coin two times. We want to calculate the
probability of getting exactly 1 head.
Poisson Distribution
• This is used when we count how often an event happens over a fixed
interval (time, area, etc.).
Example
Normal Distribution (Bell Curve)
• The normal distribution is the most common type of continuous
probability distribution.
Key features:
• Symmetric around the mean.
• Most values cluster near the mean.
University question
• Mutually exclusive event
• Bayes theorem
• Discuss the relevance of probability theory in decision making
• Explain the three concepts of probability
• What is normal distribution ? Compare it with Binomial and Poisson
distribution
• Binomial Distribution