IBA-JU

WMBA Program 5
Course Instructor: Dr Swapan Kumar Dhar
Probability

Probability, chance and likelihood are used interchangeably. In general, probability is the chance that something
will happen. The probability of an event is measured by values between 0 and 1. The probability of a
certainty is 1. The probability of an impossibility is 0. That can be shown in the following diagram.

Cannot happen Sure to happen

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00

Probability of our Chance that Egypt Chance of a head in Chance of rain in

Chance of an
sun will disappear will be the next World single toss of a coin this year
increase in gas
this year Cup Football
charge
champion

Experiment: The observation of some activity or the act of taking some measurement.
Outcome: A particular result of an experiment.
Event: A collection of one or more outcomes of an experiment.
Example 1:
(i) Experiment: Roll a die
Possible Outcomes: Observe a 1
Observe a 2
Observe a 3
Observe a 4
Observe a 5
Observe a 6
Possible event: Observe an even number
Observe a number greater than 4
Observe a number 3 or less
(ii) Experiment: Count the number of inmates at the Prison who are over 45 years of age
Possible outcomes: Counted 0 that are 45 years of age
.
.
.
Counted 29 those are over 45 years of age
.
.
.
Counted 48 those are over 45 years of age
.
.
.
Possible events: More than 13 are over 60 years
Fewer than 20 are over 60 years
.
.
.

In the first case there are six possible outcomes, but there are many possible events.

For the second experiment, the number of possible outcomes can be anywhere from zero to the total number of
inmates. So, there are a large number of possible events in this experiment.
Sample Space:

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The sample space is the set of all possible outcomes of the experiment. We usually call it S. It is important to be
able to list the outcomes clearly. For example, if I plant ten bean seeds and count the number that germinate,
the sample space is
S = {0,1,2,3,4,5,6,7,8,9,10}.
If I toss a coin three times and record the result, the sample space is
S = {HHH,HHT,HTH,HTT,THH,THT,TTH,TTT},
where (for example) HTH means ‘heads on the first toss, then tails, then heads again’.
An event is a subset of S. We can specify an event by listing all the outcomes that make it up. In the above
example, let A be the event ‘more heads than tails’ and B the event ‘heads on last throw’. Then
A = {HHH,HHT,HTH,THH},
B = {HHH,HTH,THH,TTH}.
Mutually exclusive: The occurrence of any one event means that none of the others can occur at the same
time.
Example 2: In the die-tossing experiment the six possible outcomes are mutually exclusive events.
An experiment has a set of events that includes every possible outcome. Such as the die-tossing experiment,
the set of events is called collectively exhaustive.
Collectively exhaustive: At least one of the events must occur when an experiment is conducted.
Example 3: For the die-tossing experiment, the set of events consists of 1, 2, 3, 4, 5 and 6. The set is
collectively exhaustive because it includes all possible outcomes.
Approaches to Assigning Probabilities:
There are two approaches of finding probabilities, (1) Objective and (2) Subjective.
Again objective probability is divided into (i) Classical probability and (ii) Empirical probability.
Classical Probability: This probability is based on the assumption that the outcomes of an experiment are
equally likely. So
Number of favorable outcomes
Probability of an event = P (an event) = .
Total number of possible outcomes
Example 4: The experiment is to observe the up face on a six-sided die. What is the probability that a 2 will
appear face up?
Solution:
1 Number of favourable outcomes
Probability of a two spot = = = 0.167 .
6 Total Number of possible outcomes
If only one of several events can occur at one time, we refer to the events as being mutually exclusive.
Empirical Probability: It is based on relative frequencies. The probability of an event happening is determined
by observing what fraction of the time similar events happened in the past.
Number of times event occurred in the past
P (an event) = .
Total number of observations
Example 5: Assume that during the last calendar year there were 500 births at a local hospital. 320 of them
were baby girls. Find the probability that the next birth (or any randomly selected birth) is a girl is
Number of girl born last year 320
P(Girl) = = .
Total Number of girl births 500
Example 6: An importer receives shipments of boxes each containing three items. The data for the past 100
boxes indicating the number of items in each box that were damaged are reported in the table. The probabilities
are given in the table.
Outcome ( Ei ) (Number of defects) Number of boxes P ( Ei )
0 40 40/100 = 0.40
1 27 27/100 = 0.27
2 21 21/100 = 0.21
3 12 12/100 = 0.12
100 1.00
21
For example P ( two items in any given box is damaged) = P(2) = = 0.21.
100

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Example 7: The accompanying table shows the number of computers sold daily by a retail store.

Number of computer sold Number of days

0 12
1 43
2 18
3 20
4 25

Determine the probability that the number sold today is: (a) 2 (b) less than 3 (c) more than 1 (d) at least 1.
Solution:
Number of computers sold ( Ei ) Number of days P ( Ei )
0 12 12/118
1 43 43/118
2 18 18/118
3 20 20/118
4 25 25/118
118 1.00
18
(a) P(2) = = 0.152
118
18 43 12
(b) P(E < 3) = P(2) + P(1) + P(0) = + + = 0.619
118 118 118
18 20 25 63
(c) P(E > 1) = P(2) + P(3) + P(4) = + + = = 0.534
118 118 118 118
12 106
(d) P(E ≥ 1) = 1 − = = 0.898
118 118
Subjective Probability: The probability of a particular event happening that is assigned by an individual based
on whatever information is available.
Illustrations:
1. Estimating the probability that there will be rain tomorrow.
2. Estimating the probability that you will earn grade A in this course.

Approaches to Probability

Objective Subjective

Classic Probability Empirical Probability Based on available

Information

Based on Equally Likely Based on Relative

Outcomes Frequencies

Unions, Intersections and the Relationship between Events

A set is any collection of objects.
Suppose set A consists of all the students in your statistics class and set B consists of all students at your
university who are majoring in economics. We can see this by the following Venn diagram.

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A = All students in your class. B = All economics majors. A ∩ B = A intersection B = common to both A and B
that is economics majors in your class.
Intersection of A and B : The set of all elements those are in both A and B denoted by A ∩ B.
The union of A and B , written A ∪ B and read as “ A union B” consists of those elements that are in either
A or B or both. For example, all students who are in your class (set A) , and all economics majors (set B)
regardless of whether they are in your class are elements in A ∪ B.
The Union of A and B : The set of all elements that are in A or B.
Some Basic Rules of Probability:
Rules of Addition:
Special Rule of Addition: If two events A and B are mutually exclusive, the special rule of addition states
that the probability of one or the other events’ occurring equals the sum of their probabilities. That is,
P(A or B) = P(A) + P(B) ⇒ P(A ∪ B) = P(A) + P(B)
Example 8: A machine fills plastic bags with a mixture of beans, broccoli and other vegetables. Most of the bags
contain the correct weight, but because of the slight variation in the size of the beans and other vegetables, a
package might be slightly underweight or overweight. A check of 4,000 packages in the past revealed:

Weight Event Number of packages Probability of occurrence

Underweight A 100 100/4000 = 0.025
Satisfactory B 3600 0.900
Overweight C 300 0.075
4000 1.000
What is the probability that a particular package will be either underweight or overweight?
Solution: Here the events are mutually exclusive, meaning that a package of mixed vegetables cannot be
underweight, satisfactory and overweight at the same time.
The outcome `underweight’ is the event A.
The outcome `overweight’ is the event C.
Applying the special rule of addition:
P(A or C) = P(A ∪ C) = P(A) + P(C) = 0.025 + 0.075 = 0.10
The General Rule of Addition
Example 9: Suppose Bangladesh Parjaton Corporation selected a sample of 200 tourists who visited the
country during the year. The survey revealed that 120 tourists went to Sundarban and 100 went to Paharpur.
Here it is known that 60 out of 200 visited both attractive. What is the probability that a person selected visited
either Sundarban or Paharpur?
Solution: If the special rule of addition is used, the probability of selecting a tourists who went to Sundarban is
120 100
= 0.60. Similarly, the probability of a tourist going to Paharpur is = 0.50. So, the sum of these
200 200
probabilities is 0.60+0.50 = 1.10 which is absent as total probability cannot be greater than 1. So, the
explanation is that many tourists visited both attractions and are being counted twice. So, the required
probability is
P ( Sundarban or Paharpur) = P ( Sundarban) + P ( Paharpur) - P ( both Sundarban and Paharpur)
120 100 60 160
= + − = = 0.80 .
200 200 200 200
So, this is the general rule of addition. When two events overlap, the probability is called a joint probability. The
probability that a tourist visits both attractions (0.30) is an example of a joint probability.
If A and B are not two mutually exclusive events, the general rule of addition is
P(A or B) = P(A ∪ B) = P(A) + P(B) − P(A and B) = P(A) + P(B) − P(A ∩ B) .
Example 10: What is the probability that a card chosen at random from a standard deck of cards will either be a
King or a Heart?
Solution:
Card Probability Explanation

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 King 4 4 Kings in a deck of 52 cards
P(A) =
52
Heart 13 13 Hearts in a deck of 52 cards
P(B) =
52
King of Hearts 1 1 King of Hearts in a deck of 52 cards
P(A and B) = P(A ∩ B) =
52
Using the general rule of addition,
4 13 1 16
P(A or B) = P(A ∪ B) = P(A) + P(B) − P(A ∩ B) = + − = = 0.3077 .
52 52 52 52
Rules of Multiplication
Special rule of multiplication: Here two events A and B are independent. Two events are independent if
the occurrence of one does not alter the probability of the other
For two independent events A and B , the probability that A and B will both occur is found by multiplying
the to probabilities. This is called the special rule of multiplication. Symbolically it is
P(A and B) = P(A).P(B) ⇒ P(A ∩ B) = P(A).P(B)
For three events A, B, C it is
P(A ∩ B ∩ C) = P(A).P(B).P(C)
Example 11: Two coins are tossed. What is the probability that both will land tail up?
Solution: Let A be the event of showing tail in one coin and B be the event of showing tail in other coin.
Then P(A) = 0.50 and P(B) = 0.50. Here A and B are independent. Then by multiplication rule,
1 1
P(A and B) = P(A).P(B) ⇒ P(A ∩ B) = P(A).P(B) = . = 0.25 .
2 2
Listing all of the possible outcomes can also show this. Two tails is only one of the four possible outcomes:
T T
or T H
or H T
or H H
If two events are not independent, they are referred to as being dependent.
Example 12: Suppose there are 10 rolls of film in a box and it is known that 3 are defective. A roll of film is
selected from the box randomly.
3 7
Here P ( Selecting a defective roll) = and P ( Selecting a good roll) = .
10 10
If a second roll is selected from the box without the first one being returned to the box.
Now the probability that it is defective depends on whether the first roll selected was defective or good.
Hence,
2
P ( Second roll is defective) = if the first roll selected was defective.
9
3
and P ( Second roll is defective) = if the first roll selected was good.
9
2 3
∴ The probability or is called a conditional probability because its value is conditional on (dependent on)
9 9
whether a defective or good roll of film is chosen in the first selection from the box.

∴Conditional Probability: The probability of a particular event occurring given that another event has
occurred.
General Rule of Multiplication
This rule states that for two events A and B , the joint probability that both events will happen is found by
multiplying the probability that event A will happen by the conditional probability of event B ’s occurring.
Symbolically, the joint probability ( A and B ) is found by
P ( A and B ) = P ( A). P ( B / A) ⇒ P ( A ∩ B ) = P ( A). P ( B / A) = P ( B ). P ( A / B ).

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Where P ( B / A) = P ( B ) will occur given that A has already occurred.
Example 13: Suppose there are 10 rolls of film in a box, 3 of which are defective. Two rolls are to be selected
one after another. What is the probability of selecting a defective roll followed by another defective roll?
Solution:
Let A = the first roll of film selected from the box being found defective
Let B = the second roll selected being found defective
3 2
So, P(A) = and P ( B / A) =
10 9
3 2
∴P ( A and B ) = P ( A). P ( B / A) = . = 0.07.
10 9
Example 14: Of 100 assembled components, 10 have a working defect and 20 have a structural defect. There
is a good reason to assume that no component has both defects. What is the probability that randomly chosen
components will have either type of defect?
Solution: Let the event A and B be the component which has working defect and has structural defect
respectively. Then it is given that
10 20
P(A) = = 0.01,P(B) = = 0.02 and P(A & B) = 0.
100 100
Then P(A or B) = P(A) + P(B) − P(A & B) = 0.01 + 0.02 − 0 = 0.03.
Example 15: A survey of 200 retail grocery shops revealed following monthly income pattern:

Monthly Income(Taka) Number of Shops

Under Taka 20,000 102
20,000 to 30,000 61
30,000 and above 37

(a) What is the probability that a particular shop has monthly income under Taka 20,000?
(b) What is the probability that a shop selected at random has either an income between Taka 20,000 and Taka
30,000 or an income of Taka 30,000 and more?
Solution: Let the events A, B and C represent the income under three categories respectively.
(a)Probability that a particular shop has monthly income under Taka 20,000 is
102
P(A) = = 0.51.
200
61 37
(b) P(A or B) = P(A) + P(B) = + = 0.49.
200 200
Example 16: An MBA applies for a job in two firms X and Y. The probability of his being selected in firm X is 0.7
and being rejected at Y is 0.5. The probability of at least one of his applications being rejected is 0.6. What is the
probability that he will be selected by one of the firms?
Solution: Let A and B denote the event that an MBA will be selected in firm X and will be rejected in firm Y
respectively. Then given that
P(A) = 0.7,P(A) = 1 − 0.7 = 0.3,P(B) = 0.5
P(B) = 1 − 0.5 = 0.5,P(A U B) = 0.6.
Since, P(A I B) = 1 − P(A I B) = 1 − 0.6 = 0.4, therefore, probability that he will be selected by one of the
firms is given by
P(A U B) = P(A) + P(B) − P(A I B)
= 0.7 + 0.5 − 0.4 = 0.8.
Thus, the probability of an MBA being selected by one of the firms is 0.8.

Example 17: A market research firm is interested in surveying certain attitudes in a small community. There are
125 households broken down according to income, ownership of a telephone and ownership of a TV.

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 Households with Monthly Income of Taka 8000 or Households with Monthly Income
Total
less above Taka 8000
Telephone No Telephone
No Telephone
Subscriber Telephone Subscriber
Own TV Set 27 20 18 10 75
No TV Set 18 10 12 10 50
Total 45 30 30 20 125

(a)What is the probability of getting a TV owner if a household is selected at random?

(b)If a household has an income of over Taka 8000 and is a telephone subscriber, what is the probability that he
owns a TV set?
(c)What is the conditional probability of selecting a household that owns a TV set given that the household is a
telephone subscriber?
(d) Are the events ‘ownership of a TV’ and ‘telephone subscriber’ statistically independent?
Solution:
75
(a) P (TV owner) = = 0.6 .
125
(b)There are 30(=18+12) persons whose household income is above Taka 8000 and are also telephone
subscribers. Out of these, 18 own TV sets. Hence, the probability of this group of persons having a TV set is
18
= 0.6 .
30
(c)Out of 75 households who are telephone subscribers, 45 households have TV sets. Hence the conditional
probability of selecting a household that owns a TV set given that the household is a telephone subscriber is
45
= 0.6.
75
(d)Let A and B be the events representing TV owners and telephone subscribers respectively.
75 75
P ( A) = and P ( B) = .
125 125
The probability of a person being a telephone subscriber as well as a TV owner is
45
P ( A & B ) = P ( A I B ) = P ( AB ) =.
125
75 75 9
But, P ( A) × P ( B ) = × = .
125 125 25
We know that, if two events A and B are independent, then P ( A) × P ( B ) = P ( A I B) . But for this problem, it is
so. Hence they are independent.
Example 18: A market survey was conducted in four divisions to find out the preference for brand A soap. The
responses are shown below:

Dhaka Chittagong Rajshahi Sylhet Total

Yes 45 55 60 50 210
No 35 45 35 45 160
No Opinion 05 05 05 05 20
Total 85 105 100 100 390

(a)What is the probability that a consumer selected at random, preferred brand A?

(b)What is the probability that a consumer selected at random, preferred brand A and was from Rajshahi?
(c)What is the probability that a consumer selected at random, preferred brand A given that he was from
Rajshahi?
(d)Given that a consumer preferred brand A, what is the probability that he was from Sylhet?
Solution:
Let X denote the event that a consumer selected at random preferred brand A. Also let C be the event that a
consumer selected at random is from Rajshahi. Let M denote the event that a consumer selected at random is
from Sylhet.
210
(a) P ( X ) = = 0.5398.
390

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 60
(b) P ( X I C) = = 0.1538.
390
60
P( A I C ) 390 = 0.597 .
(c) P ( X C ) = =
P (C ) 100
390
50
P( M I X ) 390 = 0.237 .
(d) P ( M X ) = =
P( X ) 210
390
Example 19: Suppose P (A) = 0.40 and P (B/A) = 0.30. What is the joint probability of A and B?
P(B I A) P(A I B) P(A & B) P(A & B)
Solution: We know P(B / A) = = = ⇒ 0.30 = ⇒ P(A & B) = 0.12.
P(A) P(A) P(A) 0.40

Exercises:
1. Some people are in favor of imposing taxes on stock shares and some are against it. Two persons are
selected and their opinions are reported. List the possible outcomes.
Solution:

Person
Outcome
1 2
1 A A
2 A F
3 F A
4 F F

2. A survey of 34 students at the Business School showed the following majors:

Majors No of Students
Accounting 10
Finance 5
Marketing 3
Human Resource Management 6
Management 10

Suppose you select a student and observe his or her major.

a) What is the probability he or she is an accounting major? Ans. 5/34.
b) Which concept of probability did you use to make this estimate? Ans. Empirical.
3. The marketing research department of a soft drink company plans to survey teenagers about a newly
developed soft drink. Each will be asked to compare it with his or her favorite soft drink.
a. What is the experiment? Ans. Asking teenagers to compare their reactions to a newly
developed soft drink.
b. What is one possible event? Ans. Answers will vary. One possibility is more than half of
the respondents like it.

4. The first card selected from a standard 52-card deck was king.
a. If it is returned to the deck, what is the probability that a king will be drawn on the second
selection? Ans. 1/52.
b. If the king is not replaced, what is the probability that a king will be drawn on the second
selection? Ans.1/51
c. What is the probability that a king will be selected on the first draw from the deck and another
king on the second draw (assuming that the first king was not replaced)? Ans. 1/52 + 1/51.

5. In each of the following cases, indicate whether classical, empirical or subjective probability is used.
a) A basketball player makes 30 out of 50 foul shots. The probability is 0.6 that she makes the next
foul shot attempted. Ans. Empirical.

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 b) A seven-member committee of students is formed to study environmental issues. What is the
likelihood that any one of the seven is chosen as the spokesperson? Ans. Classical.
c) You purchase one of 5 million tickets sold for Lotto Canada. What is the likelihood you win the $1
million jackpot? Ans. Classical.
6. A firm will promote two employees out of a group of six men and three women.
a) List the outcomes of this experiment if there is particular concern about gender equity.
Ans. MM, MW, WM, WW.
b) Which concept of probability would you use to estimate these probabilities? Ans. Classical.
7. A sample of 2000 licensed drivers revealed the following number of speeding violations.

Number of Violations Number of Drivers

0 1910
1 46
2 18
3 12
4 9
5 or more 5
Total 2000

a) What is the experiment? Ans. Survey of drivers who committed speeding violations.
b) List one possible event. Ans. 0, 0.
c) What is the probability that a particular driver had exactly two speeding violations? Ans. 18/2000.
d) What concept of probability does this illustrate? Ans. Empirical.

8. A survey of undergraduate students in the School of Business revealed the following regarding the
gender and majors of the students:

Major
Gender Accounting Management Finance Total
Male 100 150 50 300
Female 100 50 50 200
Total 200 200 100 500

(a) What is the probability of selecting a female student? Ans. 200/500.

(b) What is the probability of selecting finance or accounting major? Ans. 100/500 + 200/500.
(c) What is the probability of selecting a female or an accounting major? Which rule or addition did
you apply? Ans. 200/500 + 200/500 – 100/200. General Rule of Addition.
(d) What is the probability of selecting an accounting major, given that the person selected is a
male? Ans. 100/200.
(e) Suppose two students are selected randomly to attend a lunch with the president of the
university. What is the probability that both of those selected are accounting majors?
Ans. 200/500 X 199/499.

9. The Wood country sheriff classifies crimes by age (in year) of the criminal and whether the crime is
violent or nonviolent. As shown below, a total of 150 crimes were reported by the sheriff last year.

Age (on years)

Type of Crime Under 20 20 to 40 Over 40 Total
Violent 27 41 14 82
Nonviolent 12 34 22 68
Total 39 75 36 150

(a) What is the probability of selecting a case to analyze and finding it involved a violent crime?
Ans. 82/150.
(b) What is the probability of selecting a case to analyze and finding the crime was committed by
someone less than 40 years old? Ans. 39/150 + 75/150.

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(c) What is the probability of selecting case that involved a violent crime or an offender less than 20
years old? Which rule of addition did you apply? Ans. 82/150 + 39/150 – 27/150. General Rule.
(d) Give that a violent crime is selected for analysis, what is the probability that both are committed by a
person under 20 years old? Ans. 27/82.
(e) Two crimes are selected for review by a Judge. What is the probability that both are violent crimes?
Ans. 82/150 X 81/149.