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%
21
