TOPIC 4

Probability

What is Probability?
 Probability (kebarangkalian) is an essential component
of inferential statistics.

 It quantifies the degree of uncertainty (darjah ketidak-

pastian) or the relative likelihood (kebolehjadian relatif)
an event will occur.

 Probability theory also plays a critical role in decision

making.

 Approaches to assigning probability

 Classical approach
 Relative frequency approach
 Subjective approach

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 Basic Terms in Probability

 Experiment (uji kaji): An action or process that leads to

one of several possible outcomes (kesudahan).

 Sample space (ruang sampel): A list of all possible

outcomes of the experiment.

 Event (peristiwa): collection of one or more of the

possible outcomes of an experiment. It is a subset of the
sample space.

 The probability of any outcome or event expresses the

chance that the outcome or event will occur. It must lie
between 0 and 1.

Example 1:
An accounting firm has advertised the availability of its
report describing recent changes to the federal income tax
act. The following contingency table lists the probabilities of
medium by which the existing accounting firm clients
became aware of the report and their primary interest.

Medium
Primary interest
Radio Website Facebook
Personal tax 0.17 0.10 0.03
Corporate tax 0.13 0.26 0.07
Goods and Services Tax 0.05 0.09 0.10

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One client is selected at random, and five events are defined as
follows:

C: The client is primarily interested in corporate tax.

G: The client is primarily interested in goods and

services tax.

R: The client became aware of the report through radio.

W: The client became aware of the report through

company website.

F: The client became aware of the report through

Facebook.

Simple and Complementary Events

 Simple event (peristiwa mudah): An event that can

be described by a single characteristic.

The probability of an simple event will occur is known

as marginal probability (kebarangkalian sut).

 Complement event (peristiwa pelengkap): The

complement of event A is the event that occurs when
event A does not occur.

The complement of event A is denoted by A’

Complement Rule : P (A ) = 1 – P (A)

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 Unions and Intersections of Events

 Intersections (persilangan) of events

The intersection of events A and B is the event that

occurs when both A and B occur.

It is denoted as A and B. The probability of the

intersection is called the joint probability
(kebarangkalian tercantum).

 Unions (kesatuan) of events

The union of events A and B is the event that occurs

when either A or B or both occur.

It is denoted as A or B.

Addition Rule (Peraturan Penambahan)

 The addition rule enables us to calculate the probability
of the union of two events.

 Addition Rule :

P (A or B) = P (A) + P (B) – P (A and B)

 Mutually exclusive events (peristiwa saling eksklusif)

The occurrence of one event means that none of the

others can occur at the same time, i.e. P (A and B) = 0

P (A or B) = P (A) + P (B)
if A & B are mutually exclusive events

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Refer to Example 1
Find the probability that the client

a) aware of the report through Facebook

P (F) = 0.20 --- marginal probability

b) is not primarily interested in goods and services tax

P (G ) = 1 – P (G) = 1 – 0.24 = 0.76

c) is primarily interested in corporate tax and became

aware of the report through the company website

P (C and W) = 0.26 --- joint probability

d) became aware of the report through the Facebook or

company website

Since F & W are mutually exclusive events,

P (F or W) = P (F) + P (W) = 0.20 + 0.45 = 0.65

e) is primarily interested in goods and services tax, or

became aware of the report through the radio or both

Since G & R are not mutually exclusive events,

P (G or R) = P (G) + P (R) – P (G and R)

= 0.24 + 0.35 – 0.05 = 0.54

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 Conditional Probability

 Conditional probability (kebarangkalian bersyarat)

measures the likelihood of an event will occur, given
that another event has occurred.

Conditional probability of event A, given that event B

has occurred is
( )
𝑃 𝐴|𝐵 =
( )

Conditional probability of event B, given that event A

has occurred is
( )
𝑃 𝐵|𝐴 =
( )

Multiplication Rule
(Peraturan Pendaraban)
 The multiplication rule is used to calculate the joint
probability of two events. It is based on the formula
for conditional probability.

 Multiplication Rule :

P (A and B) = P (A | B)  P (B)

Likewise, P (A and B) = P (B | A)  P (A)

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 Independent Events
 Objective of calculating conditional probability is to
determine whether two events are independent.

 Independent events (peristiwa tidak bersandar)

The occurrence of one event has no effect on the

probability of the occurrence of any other event.

 Two events A and B are said to be independent if

P (A | B) = P (A) or P (B | A) = P (B)

 The Multiplication Rule for independent events

P (A and B) = P (A)  P (B)

Refer to Example 1
f) The probability that the client became aware of the
report through the radio, given that he or she is
primarily interested in corporate tax

( ) .
𝑃 𝑅𝐶 = = = 0.2826
( ) .

g) The probability that the client is primarily interested in

goods and services tax, given that he or she became
aware of the report through the Facebook

( ) .
𝑃 𝐺𝐹 = = = 0.5
( ) .

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h) Are R and C independent events?

If R & C are independent events, we must have either

P (R | C) = P (R) or P (C | R) = P (C)

From the contingency table,

P (R | C) = 0.2826 ; P (R) = 0.35

P (R | C)  P (R), R and C are not independent events.

Since R and C are not independent events, the joint probability

of R and C, P (R and C) CANNOT be calculated using the
Multiplication Rule for independent events. Therefore,
P (R and C)  P (R) x P (C)

Probability Trees

 The Multiplication Rule can be illustrated using a

probability tree (pokok kebarangkalian). It is useful
in visualizing events that occur in sequence.

 The events in an experiment are represented by lines.

The resulting figure resembles a tree, hence the name.

 At the ends of the “branches”, we calculate joint

probabilities as the product of the individual
probabilities on the preceding branches.

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Example 2:
It has been reported that 57% of U.S. households that rent do
not have a dishwasher, while only 28% of home-owner
households do not have a dishwasher.

If one household is randomly selected from each ownership

category, determine the probability that

a) neither household will have a dishwasher.

Answer: 0.1596

b) either one will have a dishwasher.

Answer: 0.5308

Let D represent the event that the household have a dishwasher.

Probability Tree for Example 2

(Independent Events)
Renter Homeowner Joint
household household probability

D P(DD) = 0.43 x 0.72

= 0.3096
D
P(DD’) = 0.43 x 0.28
D’
= 0.1204

D P(D’D) = 0.57 x 0.72

= 0.4104
D’

D’ P(D’D’) = 0.57 x 0.28

= 0.1596

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Example 3:
A standard certification test was given at three locations. 1,000
candidates took the test at location A, 600 candidates at location
B, and 400 candidates at location C. The percentages of
candidates from locations A, B, and C who passed the test were
70%, 68%, and 77%, respectively. One candidate is selected at
random from among those who took the test.

a) What is the probability that the selected candidate took

the test at location B?

b) What is the probability that the selected candidate

passed the test if he or she took the test at location A?

c) What is the probability that the selected candidate took

the test at location C and failed?

Probability Tree for Example 3

(Dependent Events)
Marginal
probability a) P (B) = 0.30

b) P (P | A) = 0.70

c) P (C and P )
= P (C) x P (P | C)
= 0.20 x 0.23
= 0.046

Conditional
probability

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 Bayes’ Law (Hukum Bayes)
 Bayes’ Law is a method of transforming the prior
probability of an event into a posterior probability
given that additional information is obtained.

 Prior probability (kebarangkalian prior)

The initial prob. based on the present level of info.

 Posterior probability (kebarangkalian posterior)

A revised prob. based on additional information

 Bayes’ Law is an extension of the concept of

conditional probability

Refer to Example 3
d) If the selected candidate passed the test, what is the
probability that the candidate took the test at location B.

P (A) = 0.5 , P (B) = 0.3 , and P (C) = 0.2

are prior probabilities because they are determined

prior to the results of the test

P (P | A) = 0.70 , P (P | B) = 0.68 , P (P | C) = 0.77

are the given conditional probabilities

Therefore, the conditional probability P (B |P) is known

as posterior probabilities or revised probabilities
because the prior probabilities are revised after
obtaining the results of the test.

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The additional information (results of the test) can be either

P : passed the test or P  : failed the test

The prob. that a selected candidate passed the test is

P (P) = P (P and A) + P (P and B) + P (P and C)

= 0.35 + 0.204 + 0.154 = 0.708

The revised probability that the candidate took the test at

location B when the probability of passed the test, P (P) is
obtained can be calculated as follow

𝑃(𝐵 𝑎𝑛𝑑 𝑃) 0.204

𝑃 𝐵𝑃 = = = 0.288
𝑃(𝑃) 0.708

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