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204 DS Notes Unit 5

This document contains notes on probability from an MBA Decision Science class. It defines key probability concepts like random experiments, sample spaces, random variables, and probability. It explains that probability is a number between 0 and 1 that reflects the likelihood of an event. It also covers conditional probability, independence of events, expectation, variance, and discrete and continuous probability distributions.

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Jayasri Murali
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43 views

204 DS Notes Unit 5

This document contains notes on probability from an MBA Decision Science class. It defines key probability concepts like random experiments, sample spaces, random variables, and probability. It explains that probability is a number between 0 and 1 that reflects the likelihood of an event. It also covers conditional probability, independence of events, expectation, variance, and discrete and continuous probability distributions.

Uploaded by

Jayasri Murali
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MBA@IICMR – Pune 44

MBA SEM II

Paper No. 204


Subject: Decision Science

Subject Teacher: Prof. Vidhya Hittalmani

Notes Unit 5

Probability

Meaning: A probability is a number that reflects the chance or likelihood that a particular event
will occur.

A probability of 0 indicates that there is no chance that a particular event will occur, whereas
a probability of 1

Random Experiment: A random experiment is a physical situation whose outcome cannot be


predicted until it is observed.

Sample Space: A sample space, is a set of all possible outcomes of a random experiment.

Random Variables: A random variable, is a variable whose possible values are numerical
outcomes of a random experiment. There are two types of random variables.
1. Discrete Random Variable is one which may take on only a countable number of distinct
values such as 0,1,2,3,4,…….. Discrete random variables are usually (but not necessarily) counts.
2. Continuous Random Variable is one which takes an infinite number of possible values.
Continuous random variables are usually measurements.

Probability: Probability is the measure of the likelihood that an event will occur in a Random
Experiment.

Probability is quantified as a number between 0 and 1, where, loosely speaking, 0 indicates


impossibility and 1 indicates certainty. The higher the probability of an event, the more likely it is
that the event will occur.

Conditional Probability: Conditional Probability is a measure of the probability of an event


given that (by assumption, presumption, assertion or evidence) another event has already
occurred. If the event of interest is A and the event B is known or assumed to have occurred, “the
conditional probability of A given B”, is usually written as P(A|B).
Independence: Two events are said to be independent of each other, if the probability that one
event occurs in no way affects the probability of the other event occurring, or in other words if we
have observation about one event it doesn’t affect the probability of the other. For Independent
events A and B below is true

Expectation: The expectation of a random variable X is written as E(X). If we observe N random


values of X, then the mean of the N values will be approximately equal to E(X) for large N. In
more concrete terms, the expectation is what you would expect the outcome of an experiment to
be on an average if you repeat the experiment a large number of time.

Variance: The variance of a random variable X is a measure of how concentrated the distribution
of a random variable X is around its mean.

Probability Distribution: Is a mathematical function that maps the all possible outcomes of an
random experiment with it’s associated probability. It depends on the Random Variable X ,
whether it’s discrete or continues.

1. Discrete Probability Distribution: The mathematical definition of a discrete probability


function, p(x), is a function that satisfies the following properties. This is referred as Probability
Mass Function.
2. Continuous Probability Distribution: The mathematical definition of a continuous
probability function, f(x), is a function that satisfies the following properties. This is referred
as Probability Density Function.

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