Probability A numerical measure of the likelihood that an event will occur.
Experiment Any process that generates well-defined outcomes.
Sample space The set of all sample points (experimental outcomes)
Sample point An experimental outcome and an element of the sample space.
Basic requirements of probability Two requirements that restrict the manner in which probability assignments can be made:
l. For each experimental outcome Ei, 0 ≤ P(E) ≤ 1
2. P(E)+ P(E2)+….+P(Ek)=1
Classical method A method of assigning probabilities that is based on the assumption that the experimental outcomes are equally likely.
Relative frequency method A method of assigning probabilities based on experimentation or historical data.
Subjective method A method of assigning probabilities based on judgment.
Event A collection of sample points or experimental outcomes.
Complement of event A The event containing all sample points that are not in A.
Venn diagram A graphical device for representing the sample space and operations involving events.
Union of events A and B The event containing all sample points that are in A, in B or in both.
Intersection of events A and B The event containing all sample points that are in both A and B
Addition law A probability law used to compute the probability of a union: P(A∪B)= P(A)+ P(B)- P(A∩B). For mutually exclusive events, P(A∩B)= 0, and the addition law reduces to P(A∪B)=P(A)+ P(B)
Mutually exclusive events Events that have no sample points in common: that is, A∩B is empty and P(A∩B)=0
Conditional probability The probability of an event given another event has occurred. The conditional probability of A given B is P(A / B)= P(A∩B)/P(B).
Joint probability The probability of the intersection of two events
Joint probability table A table used to display joint and marginal probabilities.
Marginal probabilities The values in the margins of the joint probability table, which provide the probability of each event separately.
Dependent events Two events A and B, where P(A/B) ≠ P(A) or P(B/A)≠ P(B): that is, the probability of one event is altered or affected by knowing whether the other event occurs.
Independent events Two events A and B, where P(A/B) = P(A) and P(B /A) =P(B); that is, the events have no influence on each other.
Multiplication law A probability law used to compute the probability of an intersection: P(A∪B)= P(A/B)P(B) or P(A∩B)= P(B/A)P(A). For independent events, it reduces to P(A∩B)=P(A)P(B).
Prior probabilities Initial probabilities of events.
Posterior probabilities Revised probabilities of events based on additional information.
Bayes' theorem A method used to compute posterior probabilities.