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Probability

Review of Sets

Definitions

Union of Sets (AUB): Elements in either set Intersection (AB): Elements in both sets Complement (Ac): Elements not in A A(BUC) = (AB)U(AC) AU(BC) = (AUB)(AUC) n(A) = n(AB) + n(ABc) n(AUB) = n(A) + n(B) n(AB) n(AUBUC) = n(A) + n(B) + n(C) n(AB) n(AC) n(BC) + n(ABC)

Rules

Solving Problems

Method

Draw diagram of intersecting sets Label known quantities Work from the inside out to determine unknowns N = 100, A = 40, B = 30, AB = 20 Find ABc = 40 20 = 20 Find (AUB)c = 100 (40 + 30 20) = 50

Example 1

Solving Problems

Example 2

A = 40, B = 30, C = 20 AB = 20, AC = 10, BC = 10 ABC = 5 ABCc = AB ABC = 20 5 = 15 ABcC = 10 5 = 5 AcBC = 10 5 = 5 ABcCc = A ABCc ABcC ABC = 15 AcBCc = 5 AcBcC = 5 AUBUC = (40 + 30 + 20) (20 + 10 + 10) + 5 = 55

Calculations

Using Table

For instance, not just male, but male and female Or looking for values such as (AcBc) Draw table with rows representing one variable and columns representing another. Systematically calculate desired values using set rules: n(A) = N n(Ac) n(ABc) = n(A) n(AB)

Method

Example Problem

500 students are male 600 plan to attend college 200 are immigrants 350 are males/college 150 are imm/college 100 are immigrant males 80 are male/immigrants/college How many students are male, non-immigrants, who do not plan to attend college?

Imm & College: Not Needed Male & College: 350 (Given) Male & No College 100 - 80 = 20 400 - 279 = 130

Male & Imm: 100 (Given) M & Non-I: 500 - 100 = 400

Probability Definitions

Rolling a 4 on a die

Can not role a 3 and an even number at same time Even and odd rolls include all possible outcomes

A: {2, 4, 6}, B: {4, 5, 6} A: {2, 4, 6} Ac: {1, 3, 5}

AUB = {2, 4, 5, 6}

AB = {4, 6}

Probability Definition

Probability Rules

P(Ac) = 1 P(A)

DeMorgans Laws

(AUB)c = AcBc (AB)c = AcUBc Example: Not (even or > 3) = odd and (<= 3) P(A) = P(AB) + P(ABc) P(AUB) = P(A) + P(B) P(AB) P(AUBUC) = P(A) + P(B) + P(C) P(AB) P(AB) P(AB) + P(ABC)

Example

80% own auto 60% own house 50% own both What percentage own an auto or a house, but not both? What percentage own neither an auto nor a house? P(ABc)+P(AcB) = (.80 .50) + (.60 .50) = .40 P(AcBc) = P[(AUB)c] = 1 (.8 + .6 .5) = .1

Solution

Conditional Probability

Definitions

Example Law of Total Probability

Sample Problem

30% have life insurance 70% medical 20% both 50% of those with only life will renew policy 40% of those with only medical will renew 60% with both will renew Determine probability that a random policy holder will renew? Draw Venn diagram and calculate regions. Set up equation for conditional probability. Use conditional definition to change and probability to conditional.

Method

Solution

A = LMc B = LcM C = LM P[A] = P[L] P[LM] = .3 - .2 = .1 P[B] = P[M] P[LM] = .7 - .2 = .5 P[C] = P[LM] = .2

Note: Looking for conditional probability that person will renew (E), given that they hold a policy (AUBUC). A, B, and C are mutually exclusive, so equations simplify.

Bayes Theorem

Example

Two urns have 5 red and 6 blue balls. A ball from urn 1 is picked randomly and placed in urn 2. If a red ball is pulled from urn 2, what is the probability that a red ball was picked from urn 1?

Solution

Calculate Probabilities

Sample Problem

Given the following data, what is the probability of a person having an accident falling into the 26 30 bracket? Age of Driver Group 1: 18-20 Group 2: 21-25 Group 3: 26-30 Group 4: 31-65 Group 5: >65 Probability of Accident .07 .05 .03 .02 .05 Portion of Drivers .03 .05 .10 .52 .30

Independence

Events are independent if the probability of one is not affected by the other. Independence Equations

P[AB] = P[A] P[B] P[A|B] = P[A] P[A] = P[B] = A&B independent P[AUB] = P[A] + P[B] P[AB] = P[A]+ P[B] P[A]*P[B] P[AUB] = + - = 5/8

Example

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