UNIVERSITY OF THE PUNJAB

Topic: Probability and its concepts

and practical implications

Subject Statistics:

Section A

Date 22-1-2020

Submitted to: DR. Ayesha Sarfraz

Submitted by: Fajar Akhtar (57)

Yusra Rahim (33)

Muntaha Imran (10)

Kashaf Amjad (20)

Iqra Batool (04)

Ayesha Shafiq (11)

Contents
Probability.................................................................................................................................................3
Definition.................................................................................................................................................3
 2
PROBABILITY

History:....................................................................................................................................................3
Range of Probability................................................................................................................................3
Probability of an Event............................................................................................................................4
Tree diagram...........................................................................................................................................4
Basic terminologies in probability...........................................................................................................6
Properties of Probability..........................................................................................................................8
Approaches to Probability.......................................................................................................................9
Union and Intersection:.........................................................................................................................16
Rules of Probability:...............................................................................................................................19
Importance of Probability......................................................................................................................29
Practical Applications of Probability:.....................................................................................................29
References:............................................................................................................................................31
 3
PROBABILITY

Probability
Definition
“Probability is the measure of uncertainty of any event (any phenomenon happened or bound
to happen).”
Probability cannot be measured in isolation and it is always relative that means it is
always in comparison to other. Probability always applies on something having some
possible outcome that’s why there can’t be any negative value.
History:
The concept of Probability originated in the 16th century when an Italian physician and
mathematician J. Cardan wrote the first book on the subject, The Book on Games of Chance. The
distinctive feature of games of chance is that the outcome of a given trial cannot be predicted
with certainty, although the collective results of a large number of trials display some regularity.
Starting with games of chance, probability today has become one of the basic tools in Statistics
& has wide range of applications in Science, Economics, Sociology & Engineering
The basic mathematics of probability theory started with games of chance, but it can
be applied to many situations, from weather forecasting to politics. Generally, the word
probability is used in our day to day conversations by coming across following statements such
as
1) Probably it may rain today.
2) He may possibly join politics.
3) Indian Cricket Team has good chances of winning World –Cup.
In this all statements, the terms probably, possibly & chance are used by me, which
conveys the sense that there is uncertainty about what has happened and what is going to happen.
Therefore, the term probability can substitute the word uncertainty.
Range of Probability
 4
PROBABILITY

Probability can be recorded on a scale of 0 to 1, showing the likelihood or chance that a

particular outcome will occur. If an event is impossible its probability is zero. Similarly, if an event
is certain to occur, its probability is one. The probability of any event lies in between these values. It
is called the range of probability and is denoted as:
0 ≤ P (E) ≤ 1.
Probability of an Event
The probability of an event, like rolling an even number, is the number of outcomes that
constitute the event divided by the total number of possible outcomes. Very simply put, a
probability is the chance of something happening. Probability is a measure of the likelihood of a
given event’s occurrence. There are events which we cannot predict with certainty, so we find out
the probability of their occurrence. For example, when we say there is a 50% chance of rain today,
we are calculating the probability of this event’s (rain) occurrence.
Tree diagram
A probability tree diagram shows all the possible events. The first event is represented by a dot.
From the dot, branches are drawn to represent all possible outcomes of the event. The probability of each
outcome is written on its branch. A tree diagram is simply a way of representing a sequence of
events. Tree diagrams are particularly useful in probability since they record all possible
outcomes in a clear and uncomplicated manner.
Example:-
Let's take a look at a simple example, flipping a coin and then rolling a die. We might want to
know the probability of getting a Head and a 4.
If we wanted, we could list all the possible outcomes:
  (H, 1) (H, 2) (H, 3) (H, 4) (H, 5) (H, 6)
(T, 1) (T, 2) (T, 3) (T, 4) (T, 5) (T, 6)
 5
PROBABILITY

Probability of getting a Head and a 4:

Here is one way of representing the situation using a tree diagram. To avoid complexities let’s
just list the outcomes "4" and "not 4":
 6
PROBABILITY

Basic terminologies in probability

Experiment: 
A process that leads to occurrence of one and only one of several possible observations is
called experiment. Any phenomenon like rolling a dice, tossing a coin, drawing a card from a
well-shuffled deck, etc.
Outcome:
The particular result of any experiment; when you flip a coin, the outcome is either heads
or tails. Similarly, when you roll a dice, the outcome is 1, 2, 3, 4, 5, or 6.
Sample Space: 
The set of all possible outcomes and a sample point is one of the possible outcomes of
the experiment.
Event: 
Any combination of possible outcomes or the subset of sample space. It is the desired one
outcome which you require or put a condition; like getting an even number on rolled dice, getting
a head/tail on a flipped coin, drawing out a king/queen/ace of any suit. It is denoted by P(E).
Example: 
A die is rolled, find the probability of getting a 3.
The event of interest is "getting a 3".
So, E = {3}.
Equally Likely Events:
When the events have the same theoretical probability of happening, then they are called
equally likely events. The results of a sample space are called equally likely if all of them have
the same probability of occurring. For example, if you throw a die, then the probability of getting
1 is 1/6. Similarly, the probability of getting all the numbers from 2,3,4,5 and 6, one at a time is
1/6. Hence, we can say conclude:

 getting 3 on a toss and 5 on a toss

 getting an even number on a toss and odd number on a toss
 7
PROBABILITY

 Getting a 1, 2 or 3 on the toss of a die and getting a 4, 5 or 6 on the toss of a die are
equally likely events, since the probabilities of each event are equal.

Complementary Events/Independent Events:

The possibility that there will be only two outcomes which states that an event will occur
or not. Like a person will come or not come to your house, getting a job or not getting a job, etc.
are examples of complementary events. Complementary events are also called mutually
exclusive events and independent events.
Some more examples are:

 It will rain or not rain today

 The student will pass the exam or not pass.
 You win the lottery or you don’t.
Dependent Event:
When two events are dependent events, one event influences the probability of another
event. A dependent event is an event that relies on another event to happen first. Dependent
events in probability are no different from dependent events in real life: If you want to attend a
concert, it might depend on whether you get overtime at work; if you want to visit family out of
the country next month, it depends on whether or not you can get a passport in time. More
formally, we say that when two events are dependent, the occurrence of one event influences the
probability of another event.
Examples:
Simple examples of dependent events:
 Robbing a bank and going to jail.
 Not paying your power bill on time and having your power cut off.
 Boarding a plane first and finding a good seat.
 Parking illegally and getting a parking ticket. Parking illegally increases your odds of
getting a ticket.
 Buying ten lottery tickets and winning the lottery. The more tickets you buy, the greater
your odds of winning.
 Driving a car and getting in a traffic accident.
 8
PROBABILITY

Collectively Exhaustive:
These are those events in which at least one of the events must occur. For Example, when
rolling a six-sided die, the outcomes 1, 2, 3, 4, 5, and 6 are collectively exhaustive, because they
encompass the entire range of possible outcomes.
Consider another example that you have a coin, the two events "heads" and "tails" are
both mutually exclusive since you can't get both "heads" and "tails" in one throw. In this case the
two events are also collectively exhaustive since there is no possibility to get anything else than
"heads" or "tails".
Mutually Non-Exclusive Events:
Two events A and B are said to be mutually non-exclusive events if both the events A
and B have at least one common outcome between them. For Example, In the case of rolling a
die the event of getting an ‘odd-face’ and the event of getting ‘less than 4’ are not mutually
exclusive and they are also known as compatible event. The event of getting an ‘odd-face’ and
the event of getting ‘less than 4’ occur when we get either 1 or 3.
Let ‘x’ is denoted as event of getting an ‘odd-face’ and ‘y’ is denoted as event of getting ‘less
than 4’
The events of getting an odd number (x) = {1, 3, 5}
The events of getting less than 4 (y) = {1, 2, 3}
Properties of Probability
 The sum of probabilities of all mutually exclusive and exhaustive events is equal to 1.
 The probability of one out of two events occurring is equal to the sum of
the probabilities of each event occurring individually, minus the probability of both
events occurring.
 The results of one chance event have no effect on the results of subsequent chance events.
Thus, the probability of obtaining heads the second time you flip it remains at ½.
 9
PROBABILITY

 If an event is a subset of another event means one event is dependent on other event then
the probability of the event which is dependent on other event is always less than or equal
to it.

 The probability always ranges between 0 and 1. The smallest possible probability value is
0. The largest possible probability value is 1. You cannot have a probability greater than
1.
0 < P (E) < 1
 Probability can never be negative.
 If an event is impossible, the probability of the event is 0.
 If an event is certain to happen, it has a probability of 1.

Approaches to Probability

There are basically two approaches to probability.

Probability

Objective Subjective

Classical Empirical
Probability Probability

Subjective Probability:
 10
PROBABILITY

Subjective probability is a type of probability derived from an individual's personal

judgment or own experience about whether a specific outcome is likely to occur. It is also called
Personalistic Probability.
It contains no formal calculations and only reflects the subject's opinions and past
experience and is very flexible. Subjective probabilities differ from person to person and contain
a high degree of personal bias. Subjective probabilities are the foundation for common errors and
biases.
Subjective probability also has its downsides. First, since it is subjective, one person's
probability may differ from another's. This is disturbing to many people. Still, it models the
reality that often people do differ in their judgments of probability
Examples of Subjective Probability:
An example of subjective probability is asking New York Yankees fans, before the
baseball season starts, about the chances of New York winning the World Series. While there is
no absolute mathematical proof behind the answer to the example, fans might still reply in actual
percentage terms, such as the Yankees having a 25% chance of winning the World Series.
In another scenario, consider a person who is asked to predict the percentage chance of
whether a flipped coin will land with heads or tails up, his initial response may be the
mathematically true 50%. If 10 coin flips occur, all resulting in the coin landing tails up, the
person may change his percentage chance to a number other than 50%, such as saying the chance
of it landing tails up is 75%. Even knowing that the new prediction is mathematically inaccurate,
the individual’s personal experience of the previous 10 coin flips has created a situation in which
he chooses to use subjective probability.
Usage in Practical Life:
It is usually applied in real-life situations, especially, related to the decision in business,
job interviews and promotions of the employee, awarding incentives, and daily life situations
such as buying and/or selling of a product. As a matter of fact, an individual may use their own
expertise, opinion, past experiences, or intuition to assign the degrees of probability to a specific
situation.
Objective Probability:
Objective probability refers to the chances or the odds that an event will occur based on
the analysis of concrete measures rather than hunches or guesswork.
 11
PROBABILITY

Each measure is a recorded observation, a hard fact, or part of a long history of collected
data. The probability estimate is computed using mathematical equations that manipulate the
data to determine the likelihood of an independent event occurring. An independent event is an
event whose outcome is not influenced by prior events. Subjective probability, by contrast, may
utilize some method of data analysis but also uses guesstimates or intuition to determine the
chances of a specific outcome.

Explanation:
Objective probability is the probability that an event will occur based on an analysis in
which each measure is based on a recorded observation or a long history of collected data. In
contrast, subjective probability allows the observer to gain insight by referencing things they've
learned and their own experience.
In finance, people ought to use objective probabilities to make decisions instead of
relying on subjective stories, personal experience, or anecdotal evidence.
Objective probability is based on empirical evidence using statistics, experiments, and
mathematical measurements rather than relying on things like anecdotes, personal experience,
educated guesses, or hunches. In the financial world, using objective probability is particularly
important in order to avoid the mistake of making emotional decisions when investing.
“Subjective probability varies from person to person—objective probability does not.”
Examples of Objective Probability:
One could determine the objective probability that a coin will land "heads" up by flipping
it 100 times and recording each observation. This would likely yield an observation that the coin
landed on "heads" approximately 50% of the time, which is an example of a purely objective
probability.
Objective vs. Subjective Probability:
Objective probabilities are a more accurate way to determine the probability of a given
outcome than subjective probability that’s because subjective probability is largely based on
human judgment and experiences. Objective probability, on the other hand, allows the observer
to gain insight from historical data and then assess the likelihood of a given outcome.
Objective Probability is divided into further two approaches which are explained below:
 12
PROBABILITY

1. Classical Approach
2. Empirical Approach
Classical Approach to Probability:
Classical probability is the statistical concept that measures the probability of something
happening. It is also called Theoretical, priori or logical approach to probability.
In a classic sense, it means that every statistical experiment will contain elements that are
equally likely to happen (equal chances of occurrence of something). Therefore, the concept of
classical probability is the simplest form of probability that has equal odds of something
happening. You can only use classical probability for very basic events, like dice rolls.
This perspective has the advantage that it is conceptually simple for many situations.
However, it is limited, since many situations do not have finitely many equally likely outcomes.
Examples:
 Rolling a fair die. It’s equally likely you would get a 1, 2, 3, 4, 5, or 6.
 Selecting bingo balls. Each numbered ball has an equal chance of being chosen.
 Guessing on a test. If you guessed on a multiple choice test with four possible answer A
B C and D, each choice has the same odds of being picked.
 Tossing a coin. There is an equal probability that your toss will yield a heads or tails
result.
Determining the Classical Probability:
How do we approach determining the classical probability of events occurring? We use a
little formula. It's pretty easy to grasp. You can put the number of favorable outcomes (the result
we are trying to get) over the total number of possible outcomes and say the probability as a
fraction.

Number of Favorable Outcomes

Probability =
Number of Possible Outcomes

The probability of a simple event happening is the number of times the event can happen,
divided by the number of possible events. So we can also write as:

P (A) = f ÷N.
 13
PROBABILITY

Where P (A) means “probability of event A”

“f” is the frequency, or number of possible times the event could happen.
N is the number of times the event could happen.
Using the Formula:
You can only use the classical probability formula when all events are equally
likely. Choosing a card from a standard deck gives you a 1/52 chance of getting a particular card,
no matter what card you choose. On the other hand, figuring out will it rain tomorrow or not isn’t
something you can figure out with this basic type of probability. There might be a 15% chance of
rain (and therefore, an 85% chance of it not raining).

Dividing the number of events by the number of possible events is very simplistic, and it
isn’t suited to finding probabilities for a lot of situations. For example, natural events like
weights, heights, and test scores need normal distribution probability charts to calculate
probabilities. In fact, most “real life” things aren’t simple events like coins, cards, or dice. You’ll
need something more complicated than classical probability theory to solve them.

Example 1: Roll of a Die S = {1, 2, · · ·, 6}

Probabilities: Each simple event has a 1/6 chance of occurring.

Example 2: Two Rolls of a Die S = {(1, 1), (1, 2), · · ·, (6, 6)}

Assumption: The two rolls are “independent.”

Probabilities: Each simple event has a (1/6) · (1/6) = 1/36 chance of occurring.

Empirical Approach to Probability:

In Empirical approach the probability of happening of an event is determined on the

basis of past experiences or observations obtained from probability experiment.

We conduct an experiment many times, then we say that:

Frequency of an Event
Probability =
Total Frequency
 14
PROBABILITY

Other names of Empirical Approach are Statistical Approach, Experimental Approach and
Relative Frequency Approach.
Formula:

Formally, Let A be an event of interest, and assume that you have performed the
same experiment n times so that n is the number of times A could have occurred. Further, let nA
be the number of times that A did occur. Now, consider the relative frequency nA/n. Then, in
this method, we “attempt” to define P (A) as:

The above can only be viewed as an attempt because it is not physically feasible to
repeat an experiment an infinite number of times. Another important issue with this definition is
that two sets of n experiments will typically result in two different ratios. However, we expect
the discrepancy to converge to 0 for large n. Hence, for large n, the ratio nA/n may be taken as a
reasonable approximation for P (A).

Examples of Empirical Probability:

383 of 751 business graduates were employed in the past. The probability that a
particular graduate will be employed in his or her major area is 383/751 = 0.51 or 51%
1- Roll of a Die
S = {1, 2, · · ·, 6}
Probabilities: Roll the given die 100 times (say) and suppose the number of times the
outcome 1 is observed is 15. Thus, A = {1}, nA = 15, and n = 100. Therefore, we say that P (A)
is approximately equal to 15/100 = 0.15.

2- Computer Sales

A computer store tracks the daily sales of desktop computers in the past 30 days.

The resulting data is:

 15
PROBABILITY

Desktops Sold No. of Days

0 1

1 2

2 10

3 12

4 5

5 or more 0

The approximate probabilities are:

Desktops Sold No. of Days Probability

0 1 1/30 = 0.03

1 2 2/30 = 0.07

2 10 10/30 = 0.33

3 12 12/30 = 0.40

4 5 5/30 = 0.17

5 or more 0 0

Thus, for example, there is a 40% chance that the store will sell 3 desktops on any given day.
 16
PROBABILITY

One may think that there are 80% chances that your best friend will call you today
because his/her car broke down yesterday and he/she will probably need a ride.
You think you have 50% chances of getting a certain job you applied for as the other
applicant is also qualified.

Union and Intersection:

Intersection of sets:
The intersection of two sets is a new set that contains all of the elements that are in both
sets.
And symbolically, it is denoted by A ∩ B or written as A and B.
For example, if A = {1, 3, 5,7} and B = {1, 2, 4, 6} then A ∩ B = { 1 } because 1 is the only
element that appears in both sets A and B.

Intersection in probability:
The probability that Events A and B both occur is the probability of the intersection of A
and B. 
The probability of the intersection of Events A and B is denoted by P (A ∩ B).
Formula:
From addition and multiplication rule, we can find probability of union and intersection
both.
But we can also calculate probability of intersection and union by using the formula of classical
probability.
Probability = Number of Favorable Outcomes / Number of Possible Outcomes

P =f/N

P (A ∩ B) = n (A∩B) / n (S)
Example: From first ten natural numbers
 17
PROBABILITY

Event A = Getting an even number {2, 4, 6, 8, 10} and Event B = getting a number greater than 5
{6, 7, 8, 9, 10}
S = {1, 2, 3, 4, 5, 6, 7, 8, 9,10}
A ∩ B = {6,8,10}
P (A ∩ B) =n (A∩B) / n (S)= 3/10
Use of Venn diagram:
Venn Diagram:
 A Venn diagram uses circles that overlap or don't overlap to show the commonalities and
differences among things or groups of things.
 Things that have commonalities are shown as overlapping circles while things that are
distinct stand alone.
 Venn diagrams are now used as illustrations in business and in many academic fields.

Intersection in Venn diagram:

If X = {1, 2, 5, 6, 7, 9, 10} and Y = {1, 3, 4, 5, 6, 8, 10}
Solution:
We find that X ∩ Y = {1, 5, 6, 10} ← in both X and Y

Important points for intersection:

 Sometimes there is no intersection at all. In that case, we say the answer is empty set or
null set.
 The intersection of any set and an empty set is an empty set. A∩∅=∅ because, as there
are no elements in the empty set, none of the elements in A are also in the empty set, so
the intersection is empty
 If A and B are mutually exclusive, then P(A ∩ B) = 0
 18
PROBABILITY

Union of sets:
The set made by combining the elements of two or more sets. So the union of sets A and
B is the set of elements in A, or B, or both. Symbolically, the union of A and B is denoted by
A ∪ B. or written as A or B.
As an example, suppose set A = {1, 2, 3} and set B = {1, 3, 5}. Then, the union of sets A and B
would be {1, 2, 3, 5}.
Union in probability:
The probability of the union of Events A and B is denoted by P (A ∪ B).
 P (A U B) means the probability that either A or B occurs, or both; it's the probability that at
least one of the event happens.
Example: From first ten natural numbers
Event A = Getting an even number {2, 4, 6, 8, 10} and Event B = getting a number greater than 5
{6, 7, 8, 9, 10}
S = {1, 2, 3, 4, 5, 6, 7, 8, 9,10}
(A U B) = {2,4,6,8,10,7,9}
P (A U B) = 7/10
Union in Venn diagram:
If A = {1,2,3,4} B = {3,4,5,6}
(A U B) = {1,2,3,4,5,6}
 19
PROBABILITY

Important points for union:

 Union is denoted by the symbol ∪.
 The general probability addition rule for the union of two events states that
P(A∪B) = P(A)+P(B)−P(A∩B), where A∩B is the intersection of the two sets.
 Values should not be repeated in union.

Rules of Probability:
There are three basic rules of probability.
 Complement rule
 Addition rule
 Multiplication rule
The Complement of an Event
The complement A′ of the event A consists of all elements of the sample space that are not in A.
Determining Complements of an Event:
If you throw one die, the sample space of a fair die will be S = {1,2,3,4,5,6}. If we define
the event A as observing an odd number, then A= {1,3,5}. The complement of A will be all the
elements of the sample space that are not in A. Thus, A′= {2,4,6}.
This leads us to say that the sum of the possible outcomes for event A and the possible
outcomes for its complement, A′, is all the possible outcomes in the sample space of the
experiment.
The Complement Rule:
 20
PROBABILITY

The Complement Rule states that the sum of the probabilities of an event and its
complement must equal 1.
P(A)+P(A′) = 1
As you will see in the following examples, it is sometimes easier to calculate the
probability of the complement of an event than it is to calculate the probability of the event itself.
Once this is done, the probability of the event, P(A), is calculated using the relationship 
P(A)=1−P(A′).
Using the Complement Rule:
1. Suppose you know that the probability of getting the flu this winter is 0.43. What is the
probability that you will not get the flu?
Let the event A be getting the flu this winter. We are given P(A)=0.43. The event of not getting
the flu is A′. Thus, P(A′) = 1−P(A)=1−0.43=0.57.
2. Two coins are tossed simultaneously. Let the event A be observing at least one head.
What is the complement of A, and how would you calculate the probability of A by using the
Complement Rule?
Since the sample space = {HT, TH, HH,TT}, Event A={HT,TH,HH}, the complement
of A will be all events in the sample space that are not in A. In other words, the complement will
be all the events in the sample space that do not involve heads. That is, A′={TT}.
We can draw a simple Venn diagram that shows A and A′ when tossing two coins as follows:

The second part of the problem is to calculate the probability of A using the Complement
Rule. Recall that P(A)=1−P(A′). This means that by calculating P(A′), we can easily
calculate P(A) by subtracting P(A′) from 1.
P(A′) = P(TT)=1/4
 21
PROBABILITY

P(A)= 1−P(A′) =1−1/4=3/4

Obviously, we would have gotten the same result if we had calculated the probability of
event A occurring directly. 
Rules of probability

Introduction

When we require the probability of two events occurring simultaneously or the

probability of one or the other or both of two events occurring then we need probability laws to
carry out the calculations. For example, if a traffic management engineer looking at accident
rates wishes to know the probability that cyclists and motorcyclists are injured during a particular
period in a city, he or she must take into account the fact that a cyclist and a motorcyclist might
collide. (Both events can happen simultaneously).

The Addition law

The addition rule for probabilities describes two formulas, one for the probability for
either of two mutually exclusive events happening and the other for the probability of two non-
mutually exclusive events happening.
Mutually exclusive:
Mutually exclusive if they cannot occur at the same time. Another word that means
mutually exclusive is disjoint. If two events are disjoint, then the probability of them both
occurring at the same time is 0.It is just the sum of the probabilities of the two events.
P(A ∪ B) = P(A) + P(B)
Or
P(A or B) = P(A) + P(B)
For example, a glass jar contains 1 red, 3 green, 2 blue, and 4 yellow marbles. If a single
marble is chosen at random from the jar, what is the probability that it is yellow or green?
Probabilities:

4
P(yellow) =
10
 22
PROBABILITY

3
P(green) =
10

P(yellow or green) =P(yellow) +P(green)

4 3
= +
10 10

7/10
=

Venn diagram for mutually exclusive case:

English logician J.Venn (1835-1888) developed a diagram to portray graphically the
outcome of an experiment. The mutually exclusive concept and various other rules for combating
probabilities can be illustrated using this device. To construct a Venn diagram, a space is first
enclosed representing the total of all possible outcomes. This space is usually in the form of a
rectangle. An event is then represented by a circular area which is drawn inside the rectangle
proportional to the probability of the event. The following Venn diagram represents the mutually
exclusive concept. There is no overlapping of the events, meaning that the events are mutually
exclusive.

Event A Event B Event C

 23
PROBABILITY

Similarly, A set of 20 German Shepherd dogs is observed. 12 are male, 8 are female, 10
have some brown coloring, and 5 have some white sections of fur. Answer the following using
Venn Diagrams. Draw a Venn diagram simply showing the sets of male and female dogs.
The Venn diagram below demonstrates the situation of mutually exclusive events where
the outcomes are independent events. If a dog cannot be both male and female, then there is no
intersection. Being male precludes being female and being female precludes being male: in this
case, the characteristic gender is therefore mutually exclusive. A Venn diagram shows this as
two sets with no intersection. The intersection is said to be the null set using the mathematical
symbol.

Non-mutually-Exclusive:
Two events A and B are said to be mutually nonexclusive events if both the events A and
B have at least one common outcome between them. The events A and B cannot prevent the
occurrence of one another so from here we can say that the events A and B have something
common in them. It means that some overlap exists between the two events in question and the
formula compensates for this by subtracting the probability of the overlap, P(Y and Z), from the
sum of the probabilities of Y and Z. The second formula is the sum of the probabilities of the two
events minus the probability that both will occur.
P(A or B) = P(A) + P(B) - P(A and B)
Or
P(A ∪ B) = P(A) + P(B) − P(A ∩ B)
Let's look at experiments in which the events are non-mutually
Male Female
exclusive.
For example, a single card is chosen at random from a standard deck of
52 playing cards. What is the probability of choosing a king or a club?
 24
PROBABILITY

Probabilities:
P(king or P(king P(king of
= +P(club)-
club) ) clubs)

4 13 1=
= + -
52 52 52

16
=
52

Venn diagram for non -mutually exclusive case :

The outcome of an experiment may not be mutually exclusive. Suppose, for illustration,
that the Florida tourist commission selected a sample of 200 tourists who visited the state during
the year. The survey revealed that 120 tourists went to the Disney world and 100 went to the
Busch Gardens near Tampa. What is the probability that person selected visited either Disney
World or Busch Gardens? If the special rule of addition is use, the probability of selecting a
tourist who went to Disney world is 0.60, found by 120/200. Similarly the probability of a tourist
going to Busch Gardens is 0.50. the sum of these probabilities is 1.10. we know that this
probability cannot be longer than 1.00. the explanation that many tourists visited both attractions
and being are counted twice. A check of survey responses revealed that 60 out of 200 sampled
did, in fact, visit both attractions.
To answer our question that what is the probability a selected person visited either Disney
World or Busch Gardens? Thus first add the probability that a tourist visited Disney World and
the probability he/she visited Busch Gardens and second subtract the probability of visiting both.
 25
PROBABILITY

P(Disney or Busch) is equal to P(Disney) plus P(Busch) minus P(both Disney and
Busch)0.60plus0.50 – 0.30 is equal to 0.80

When two events both occur, the probability is called a Joint Probability. The following
Venn diagram shows that two events are not mutually exclusive. The two events overlap to
illustrate the joint event that some people have visited both attractions.

P(Disney)_0.60 P(Busch)-0.50

10
Draw a second Venn diagram illustrating that 10 of the male dogs have brown coloring.

P(Disneyland Busch)-3.0
The Venn diagram below shows the overlap between male and brown where the number 10 is
placed in it. This represents male intersects brown: both male and brown. This is the intersection
of these two characteristics. To get the union of Male and Brown, then it is simply the two
circled areas minus the overlap. In proper terms will give us the number of dogs in the union of
these two sets. If we did not subtract the intersection, we would have double counted some of the
dogs.
 26
PROBABILITY

Brown

Multiplication rule:

The multiplication rule states that:

“The probability of occurrence of given two events or in other words the probability of

Male

intersection of two given events is equal to the product obtained by finding the product of the
probability of occurrence of both events.”

Multiplication law in probability applies to combination of events. When the events have to
occur together then we make use of the multiplication law of probability. Now two cases arise:
whether the events are independent or dependent.
Independent events :
The events are said of be independent only when the occurrence of one event does not change
the probability of occurrence of any other event with it.
This implies that if A and B are two events given then:

P (A and B) = P (A ∩ B) = P (A) * P (B)

Or

P(A and B)=P(A)⋅P(B)

 27
PROBABILITY

For example, we have two events of drawing two candies from a box one by one but with
replacement. It is clear that here the given events are completely independent and thus we can
multiply the probabilities of the given two events for finding out the probability of combined
events.

For example, a bag contains 3 pink candies and 7 green candies. Two candies are taken out from
the bag with replacement. Find the probability that both candies are pink.

Let A = event that first candy is pink and B = event that second candy is pink.

→ P (A) = 3/10

Since the candies are taken out with replacement, this implies that the given events A and B are
independent.

→ P (B|A) = P (B) = 3/10

Hence by the multiplication law we get,

P (A ∩ B) = P (A) * P (B|A)

→ P (A ∩ B) = 3/10 * 3/10

= 9/100 = 0.09

Similarly, if you have a cowboy hat, a top hat, and an Indonesian hat called a songkok.
You also have four shirts: white, black, green, and pink. If you choose one hat and one shirt at
random, what is the probability that you choose the songkok and the black shirt?

The two events are independent events; the choice of hat has no effect on the choice of shirt.

There are three different hats, so the probability of choosing the songkok is 1/3 . There
are four different shirts, so the probability of choosing the black shirt is1/4 .
So, by the Multiplication Rule:

P(songkok and black shirt)=1/3⋅1/4=1/12
Dependent events:
 28
PROBABILITY

The given events are said to be dependent when the occurrence of one event changes the
probability of occurrence of any other event. In case when we have dependent events we have to
be very careful in determining the probability of the second event after the occurrence of first
event. In such case the multiplication rule is modified as:

P (A and B) = P (A ∩ B) = P (A) * P (B|A)

Or

P(A and B)=P(A)⋅P(B | A)

Here, P (B|A) is the probability of occurrence of the second event B when the first event A has
already occurred.

Now, suppose the candies are taken from the box without putting the first one back. It is clear
that the events are dependent and thus we need to find the conditional probability for finding the
probability of occurrence of combined event.

For example, a bag has 4 white cards and 5 blue cards. We draw two cards from the bag one by
one without replacement. Find the probability of getting both cards white.

Let A = event that first card is white and B = event that second card is white.

And, P (A) = 4/9

Now P (B) = P (B|A) because the events given are dependent on each other.

→ P (B) = 3/8.

So, P (A ∩ B) = 4/9 * 3/8 = /16.

Similarly, suppose you take out two cards from a standard pack of cards one after another,
without replacing the first card. What is probability that the first card is the ace of spades, and the
second card is a heart?
 29
PROBABILITY

The two events are dependent events because the first card is not replaced. There is only one ace
of spades in a deck of 52 cards. So:

P(1st card is the ace of spades)=1/52

If the ace of spaces is drawn first, then there are 51 cards left in the deck, of which 13 are hearts:

P(2nd card is a heart | 1st card is the ace of spades)=13/51

So, by the multiplication rule of probability, we have:

A B A B
P(ace of spades, then a heart)=1/52⋅13/51

=13/4 ⋅ 13 ⋅ 51

=1/204 P(A INTERSECTS B) P(B)

Venn diagram for multiplication rule:

The Multiplication Rule of Probability using the notation of Venn diagrams :

P(A and B)=P(A)⋅P(B | A)

The multiplication rule can be modified with a bit of algebra into the following conditional rule.
Then Venn diagrams can then be used to demonstrate the process.
The multiplication rule must also be altered if the two events are independent. Independent
events are defined as a situation where the conditional probability is simply the probability of the
event of interest. One easy way to remember this is to consider what we mean by the word
“and.” We see that the Multiplication Rule has translated the word “and” to the Venn notation
for intersection. Thus the simple example of probability multiplication by Venn diagram is as:
Thus probability of A intersection B is divided by probability of B. As shown in given below
 30
PROBABILITY

Importance of Probability
The concept of probability is of great importance in everyday life. Statistical analysis is
based on this valuable concept. In fact the role played by probability in modern science is that of
a substitute for certainty.
The following discussion explains it further:
 The probability theory is very much helpful for making prediction. Estimates and
predictions form an important part of research investigation. With the help of statistical
methods, we make estimates for the further analysis. Thus, statistical methods are largely
dependent on the theory of probability.
 It has also immense importance in decision making.
 It is concerned with the planning and controlling and with the occurrence of accidents
of all kinds.
 It is one of the inseparable tools for all types of formal studies that involve uncertainty.
 The concept of probability is not only applied in business and commercial lines, rather
than it is also applied to all scientific investigation and everyday life.
 Before knowing statistical decision procedures one must have to know about the theory
of probability.

Practical Applications of Probability:

Probability has something to do with a chance. It is the study of things that might happen
or might not. We use it most of the time, usually without thinking of it. We don’t perform actual
probability problems in our daily life but use subjective probability to determine the course of
action or any judgment. Everything from the weather forecasting to our chance of dying in an
accident is a probability.
Let us discuss some daily life examples of probability:
Weather Forecasting:
 31
PROBABILITY

Before planning for an outing or a picnic, we always check the weather forecast. Suppose
it says that there is a 60% chance that rain may occur. Do you ever wonder from where this 60%
come from? Meteorologists use a specific tool and technique to predict the weather forecast.
They look at all the other historical database of the days, which have similar characteristics of
temperature, humidity, and pressure, etc. And determine that on 60 out of 100 similar days in the
past, it had rained.
Batting Average in Cricket:
Batting average in Cricket represents how many runs a batsman would score before
getting out. For example, if a batsman had scored 40 runs out of 100 from boundaries in the
previous match. Then, there is a chance that he would score 40% of his runs in the next match
from boundaries.
Politics:
Many politics analysts use the tactics of probability to predict the outcome of the
election’s results. For example, they may predict a certain political party to come into power;
based on the results of exit polls.
Flipping A Coin Or Dice:
Flipping a coin is one of the most important events before the start of the match. There is
no surety, either head will come or not. Both head and tail have 1 out of 2, i.e., 50% chances to
occur. Hence, the probability of getting the desired outcome is 0.5. Similarly, while playing with
dice, there are 1 out of 6 chances, that the required number will come.
Insurance:
Probability helps in analyzing the best plan of insurance which suits you and your family
the most. For example, you are an active smoker, and chances of getting lungs disease are higher
in you. So, instead of choosing an insurance scheme for your vehicle or house, you may go for
your health insurance first, because the chance of your getting sick are higher. For instance,
nowadays people are getting their mobile phones insured because they know that the chances of
their mobile phones getting damaged or lost are high.
Accidents:
Rates of car accidents have increased rapidly in the past decades. For example, if a city
has a population of one lakh, and the death rate in car accidents is 500. So, the chance of being
 32
PROBABILITY

killed in a crash is 500/1 lakh is 0.05%. Thus, a person has a 0.05% chance to die in a car
accident.
Lottery Tickets:
Winning or losing a lottery is one of the most interesting examples of probability. In a
typical Lottery game, each player chooses six distinct numbers from a particular range. If all the
six numbers on a ticket match with that of the winning lottery ticket, the ticket holder is a
Jackpot winner- regardless of the order of the numbers. The probability of this happening is 1 out
of 10 lakh.
Playing Cards:
There is a probability of getting a desired card when we randomly pick one out of 52. For
example, the probability of picking up an ace in a 52 deck of cards is 4/52; since there are 4 aces
in the deck. The odds of picking up any other card is therefore 52/52 – 4/52 = 48/52.
Study:
Tomorrow is your exam and you haven't studied much, you have got so much to cover in just a
single night. You directly jump to chapter 2 because Probability of question coming from this
chapter is high. Why would you start studying in this manner because there is a Probability that
you won’t be able to finish the whole syllabus in a single night.
We use probability in almost every minute or major assumptions and decisions that we make in
our daily activities, out mind calculates all the stuff it’s just we don’t realize it.

References:
 https://learn.lboro.ac.uk/archive/olmp/olmp_resources/pages/workbooks_1_50_jan2008/
Workbook35/35_3_addn_mult_laws_prob.pdf
 https://www.middlesex.mass.edu/ace/downloads/tipsheets/prob_adm.pdf
 https://www.investopedia.com/terms/a/additionruleforprobabilities.asp
 33
PROBABILITY

 https://www.varsitytutors.com/hotmath/hotmath_help/topics/multiplication-rule-of-
probability
 https://probabilityformula.org/probability-multiplication-rule.html
 https://opentextbc.ca/introbusinessstatopenstax/chapter/venn-diagrams/
 https://web.ma.utexas.edu/users/mks/RA/prob.pdf
 https://www.investopedia.com/terms/s/subjective_probability.asp
 https://www.investopedia.com/terms/o/objective-probability.asp