PROBABILITY CONCEPTS

Charito B. Julian

Mariano Marcos State University

COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability
• foundation of statistics
• represents the chance that something will happen
• it is expressed as fraction (1/2) or as decimal (0.50)
• non-negative number (0≤ P ≤ 1)
0= something can never happen
1 = something will always happen

Mariano Marcos State University

COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Terminologies
• Experiment – activity that produces an event
• Event – one or more possible outcomes of doing something
- subset of the sample space
• Sample space – set of all possible events in an experiment

Example 1. In a coin-toss experiment, what is the probability of the

event heads?
Sample space (S) = {H, T} ; n(S)=2 Events: A={H}; B={T}; n(A) = 1
𝑛(𝐴) 1
P(A)= =
𝑛(𝑆) 2
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
Can you work on this?
What is the probability that an even number
shows up in a roll of a die?

n(S) = ?
n(A) = ?
P(A) = ?
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Axioms of Probability
Axiom – conditions that must be satisfied

1. P(A) ≥ 0 for any event A

2. P(S) = 1 where S=sample space
3. Ai ∩ Aj = 0, where i ≠ j
Mutually exclusive – if one and only one of the events can take place at
a time.
Ex. On any single toss, either heads or tails may turn up, but not both.

Mariano Marcos State University

COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
Illustrative Problems
1. What is the probability of rolling a 5 on a die?

2. What is the probability of getting two heads on a single toss of two

coins?

3. Suppose that your college admission office knows from past data
that about 50 of its 150 entering freshmen Accounting Technology
students leave school for academic reasons by the end of the first
semester. What is the probability of a freshman leaving school for
academic reasons by the end of the first semester?
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability Rules
1. Addition (Mutually Exclusive)
P(A or B) = P(A) + P(B)
Ex. The following table shows the experience data for fifty welders in a
fabrication shop. What is the probability that a welder selected at
random will have 6 or more years of experience?
Years of Experience Number
0-2 5
3-5 10
6-8 15
More than 8 20
Total 50
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability Rules
2. Addition (Not mutually exclusive)
P(A or B) = P(A) + P(B) – P(A and B)
Ex. The Board of Accountancy is composed of the following 5 persons.
If the members of the Board decide to elect a chairperson by random
draw, what is the probability that the chairperson will be either female
or over 35. Person Age Sex
1 31 Male
2 33 Male
3 46 Female
4 29 Female
5 41 Male
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability Rules
3. Joint Probability, Independent Events
P(AB) = P(A) x P(B)
Ex1. Probability of getting three heads on three successive tosses of a
fair coin.
Ex2. Probability of getting three tails on three successive tosses of a
biased coin: P(H) = 0.90; P(T) = 0.10
Ex3. Probability of at least two heads on three tosses.

Mariano Marcos State University

COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability Rules
4. Conditional Probability, Independent Events
P(B│A)= P(B)
Ex. What is the probability that the second toss of a fair coin will result
in heads, given that heads occurred on the first toss?

Mariano Marcos State University

COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability Rules
5. Conditional Probability, Dependent Events
𝑃(𝐴𝐵)
P(A│B)= 𝑃(𝐵)
Ex. Assume that we have an urn containing 10 balls distributed as
follows:
3 are red and dotted
1 is red and striped
2 are gray and dotted
4 are gray and striped
a. What is the probability of dotted ball given red?
b. What is the probability that it is gray given that it is dotted?
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability Rules
6. Joint Probability, Dependent Events
P(AB) = P(A │ B) x P(B)
Ex. Assume that we have an urn containing 10 balls distributed as
follows:
3 are red and dotted
1 is red and striped
2 are gray and dotted
4 are gray and striped
What is the probability of drawing gray and striped ball?
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
 Probability Rules
7. Marginal Probability
P(A) = P(AB) + P(AC)
Ex. Assume that we have an urn containing 10 balls distributed as
follows:
3 are red and dotted
1 is red and striped
2 are gray and dotted
4 are gray and striped
What is the probability of drawing a dotted ball?
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines
Mariano Marcos State University
COLLEGE OF BUSINESS, ECONOMICS AND ACCOUNTANCY
City of Batac, Ilocos Norte, Philippines