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There is a 50% chance from experimental probability of you going to the movies and missing on
opening night(experiment done by discovery team in New York results suggest)

In everyday life everybody is talking of chance ..........MBA aspirants talking about their chance to
become a successful manager, cricket teams thinking of their chance to win the coming T-20 world
cup etc. Thus to understand, forecast and predict about the event to occur again in future we need
to know their probability

G


 

Probability is used to predict the chance of things happening in the future. The

Chance that an event will happen can be represented as a number. That

Number is called the probability that the event will happen.

Œrobability was invented primarily in an attempt to improve the chances of

mathematicians betting on Roulette and card games in gambling halls some years
ago.
 Probability is used to predict the chance of things happening in the future. The
chance that an event will happen canbe represented as a number. That number is called the

Probability that the event will happen.

In business, probability theory is used in the calculation of long -term gains and losses. This is
how a company whose business is based on risk calculates "probability of profitability" within
acceptable margins. An example of this is the way in which life insurance companies calculate
the cost of life insurance policies and is based on how many policy holders are reasonably
expected to die within a year versus revenue generated from other policies extended. In this
scenario it is important to point out that in order for a company to mitigate the risk associated
with loss of revenue it must issue a substantial number of policies.

Probability is measured on a scale of 0 to 1, where 0 means the event is impossible and

1 means that it is certain. Probability can be expressed as a fraction ,decimal or a percentage.

In this section of this week let us recall from our past studies how to find probability of any event

The probability that an event, A, will happen is written as P(A).

P(A)=number of favourable outcome

Total number of outcomes

If there are ten glasses different liquids are kept on the table one containing wine ,and if you are
asked to pick up the glass of wine ,then you͛re to be successful is 1/7 .

Let us understand how,

A=event denoting picking a wine glass

Total number of ways in which he can pick a glass containing liquid =7

Number of ways in which he can pick up a wine glass=1(as there is only one wine glass)

So

P(A)=number of ways in whichwine glass can be picked 

Total number of ways in which he can pick any glass

=1/7

The probability that the event A does not happen is called the complement of A and is written as A'

As either A must or must not happen then, given that the probability of a certainty is equal to 1:

P(A') = 1 ʹ P(A)

E.g. If P(pass)=1/4 then P(fail)=3/4

Let us take another example and understand it better,

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Y 


Y 


Y 
 




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Let,

Y= yasmin winning both sets

Y1= Yasmin winning first set

Y2= Yasmin winning second set

A= Ali winning both the sets

A1=Ali winning the first set

A2=Ali winning the second set

T= Ali and Yasmin winning one set each

Y Œ

 

 

Then,

P(y)=P(Y1)*P(Y2)

=2/3 *2/3

=4/9

Y Œ

 




Then ,

P(a)=P(A1)*P(a2)

[By using formula Π#$Π#%Π), when events are mutually exclusive]

=1/3*1/2 (as P(Y1)=2/3 then P(A1)=1 - 2/3=1/3)

= 1/6
 Y Œ

 

 



  

 #

P(T)=P(Y1)*P(Y2͛)+P(A1)*P(A1͛)

[By using the formula Π #$Π#&Π# when the events are mutually exclusive events]

=2/3*1/3+1/3*1/2

= 7/18

2.

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