TML 3793 APPLIED STATISTIC

CAPT Ts DR MUHAMAD LAZIM BIN TALIB

NORM PSYCHOLOGICAL COMPUTING EXPERT

© 2002 Thomson / South-Western Slide 1-1

 Chapter 4,
Part A
Probability

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 Learning Objectives
• Comprehend the different ways of
assigning probability.
• Understand and apply marginal, union,
joint, and conditional probabilities.
• Select the appropriate law of probability to
use in solving problems.
• Solve problems using the laws of
probability including the laws of addition,
multiplication and conditional probability
• Revise probabilities using Bayes’ rule.

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Methods of Assigning Probabilities
• Classical method of assigning probability (rules and
laws)

• Relative frequency of occurrence (cumulated historical

data)

• Subjective Probability (personal intuition or reasoning)

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 Classical Probability
• Number of outcomes leading
to the event divided by the
total number of outcomes
possible
• Each outcome is equally P( E ) 
n
e

likely N
• Determined a priori -- prior Where:
to the experiment
N  total number of outcomes
• Applicable to games of
chance ne
 number of outcomes in E
• Objective -- everyone
correctly using the method
assigns an identical
probability

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 Relative Frequency Probability
• Based on historical
data
• Computed after n
performing the P( E )  e
N
experiment
• Number of times an Where:
event occurred divided N  total number of trials
by the number of trials
• Objective -- everyone n e
 number of outcomes
correctly using the producing E
method assigns an
identical probability

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 Subjective Probability
• Comes from the person’s intuition or
reasoning
• Subjective -- different individuals may
(correctly) assign different numeric
probabilities to the same event
• Degree of belief
• Useful for unique (single-trial) experiments
– New product introduction
– Initial public offering of common stock
– Site selection decisions
– Sporting events

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 Structure of Probability
• Experiment
• Event
• Elementary Events
• Sample Space
• Unions and Intersections
• Mutually Exclusive Events
• Independent Events
• Collectively Exhaustive Events
• Complementary Events
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 Experiment
• Experiment: a process that produces
outcomes
– More than one possible outcome

• Event: an outcome of an experiment

– usually denoted by an uppercase letter, e.g., A,
E1

• Elementary Event: cannot be decomposed or

broken down into other events

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 An Example Experiment
Experiment: Randomly select, without
replacement, two families from the residents
of a town with four families
 Elementary Event:
the sample includes Family Children in Number of
Household Automobiles
families A and C
 Event: each family in A Yes 3
the sample has B Yes 2
C No 1
children in the
D Yes 2
household
 Event: the sample
families own a total of
four automobiles
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 Sample Space
• A complete roster or listing of all
elementary events for an experiment

• Methods for describing a sample space

– roster or listing
– tree diagram
– set builder notation
– Venn diagram

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 Sample Space: Roster Example
• Experiment: randomly select, without
replacement, two families from the
residents of the small town
• Each ordered pair in the sample space is
an elementary event, for example -- (D,C)
Children in Number of Listing of Sample Space
Family Household Automobiles
(A,B), (A,C), (A,D),
A Yes 3
(B,A), (B,C), (B,D),
B Yes 2
(C,A), (C,B), (C,D),
C No 1
(D,A), (D,B), (D,C)
D Yes 2

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Sample Space: Tree Diagram for
Random Sample of Two Families
B
A C
D
A
B C
D
A
C B
D
A
D B
C
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Sample Space: Set Notation for
Random Sample of Two Families

• S = {(x,y) | x is the family selected on

the first draw, and y is the family
selected on the second draw}
• Concise description of large sample
spaces

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 Union of Sets

• The union of two sets contains an instance

of each element of the two sets.

X = {1,4,7,9}
Y = {2,3,4,5,6}
X  Y = {1,2,3,4,5,6,7,9}

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 Intersection of Sets
• The intersection of two sets contains only those
element common to the two sets.

X = {1,4,7,9}
Y = {2,3,4,5,6}
X  Y = {4} X Y

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 Mutually Exclusive Events

• Events with no common outcomes

• Occurrence of one event precludes the

occurrence of the other event

P(X  Y ) = 0

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 Independent Events
• Occurrence of one event does not affect
the occurrence or nonoccurrence of the
other event
• The conditional probability of X given Y
is equal to the probability of X.
• The conditional probability of Y given X
is equal to the probability of Y.
P( X | Y )  P( X ) and P(Y | X )  P(Y )

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 Collectively Exhaustive Events
• Contains all possible elementary events
for an experiment

E1 E2 E3

Sample Space with three

collectively exhaustive events

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 Complementary Events
• All elementary events not in the event A
are in its complementary event.
P( Sample Space )  1
P( A)  1  P( A)

Sample
Space A A
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 Continue with Chapter 4, Part B

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