REVIEW OF BASICS OF

PROBABILITIES AND PROBABILITY

RULES
Learning Objectives
At the end of this module, learners are expected to:
1. Describe probability concepts.
2. Describe the sample space and events of a statistical experiment.
3. Distinguish categories of probabilities.
4. Apply the definitions and the rules of probability on simple
probabilities.
5. Distinguish different event possibilities.
Probability P(E) (Jaggia et al, 2021)

Probability – is a numerical value that measures the

likelihood that an event occurs whose value
ranges between zero and one.
0 ≤ P(X) ≤ 1
where:
0 = indicates impossible event
1 = indicates definite events
Probability Concepts (Jaggia et al, 2021)
Sample Space (S) (Walpole et al, 1998)

Sample Space (S) – is the set of all possible outcomes

resulting from an experiment (or statistical
experiment).
An experiment (or statistical experiment) – is a process
that leads to one of several possible outcomes.
Example of experiment:
• Tossing a coin whose possible outcomes are head or
tail.
Example of experiment:
• Tossing a single die whose possible outcomes are 1, 2, 3,
4, 5, or 6.
• Tossing a pair of dice (say red and green) whose possible
outcomes are (1, 2), (2, 2), (2, 3), … (6, 6).
• Giving birth to a child either male or female.
• Demand which could be low, medium, or high.
• A proposal that could either be approved or not
approved.
• Competitors’ action as to whether they will expand their
product or not.
Event (E) (Walpole et al, 1998)

Event (E) – is the subset of the sample space.

- is the set of the desired outcome of an
experiment.
 Examples of Probability: Finding the Sample Space
Example 1:
Find the sample space for rolling
two dice.
Solution:
Since each die can land in six
different ways, and two dice are
rolled, the sample space can be
presented by a rectangular array.
The sample space is the list of pairs
of numbers in the chart.

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 Examples of Probability: Finding the Sample Space
Example 2:
Find the sample space for drawing
one card from an ordinary deck of
cards.
Solution:
Since there are 4 suits (hearts,
clubs, diamonds, and spades) and
13 cards for each suit (ace through
king), there are 52 outcomes in the
sample space.

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 Examples of Probability: Finding the Sample Space
Example 3:
Find the sample space for the gender of the children if a family has
three children. Use B for boy and G for girl.
Solution:
There are two genders, male and female, and each child could be either
gender. Hence there are eight possibilities, as shown below:
BBB, BBG, BGB, GBB, GGG, GGB, GBG, BGG

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Elementary Statistics by A. G. Bluman

 The Tree Diagram
A tree diagram is a device consisting of line segments emanating
from a starting point and also from the outcome point. It is to
determine all possible outcomes of a probability experiment.

Elementary Statistics by A. G. Bluman

 Examples of Probability: A tree diagram
Example 4:
Use a tree diagram to find the
sample space for the gender of
three children in a family.
Solution:
There are two genders, male and
female, and each child could be
either gender. Hence there are
eight possibilities, as shown below:
BBB, BBG, BGB, GBB, GGG, GGB, GBG, BGG

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Elementary Statistics by A. G. Bluman
 Examples of Probability:
Example 1:
For a card drawn from an ordinary deck, find the probability of getting a queen.
Solution:
Since there 52 cards in a deck and there are four queens,

4 1
P(Queen ) = =
52 13

Elementary Statistics by A. G. Bluman

 Examples of Probability:
Example 2:
If a family has three children, find the probability that all the children are girls.
Solution:
The sample space for the gender of children for a family that has three children is
BBB, BBG, BGB, GBB, GGG, GGB, GBG, BGG. Since there is one way, (GGG),
in eight possibilities for all three children to be girls,

1
P(GGG ) =
8

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 Examples of Probability:
Example 3: Solution:
A card is drawn from an ordinary deck. Find these a. Refer to the sample
probabilities. space of a deck of 52 p.c.
a. Getting a Jack There are four Jacks so
there are 4 outcomes in
b. Getting the 6 of clubs event E and 52 possible
c. Getting a 3 or a diamond outcomes in the sample
d. Getting a 3 or a 6 space S, hence,
4 1
P( jack ) = =
52 13

Elementary Statistics by A. G. Bluman

 Examples of Probability:
Example 3: Solution:
A card is drawn from an ordinary deck. Find these b. Since there is only one 6
probabilities. of clubs in event E, the
a. Getting a Jack probability of getting a 6 of
clubs is,
b. Getting the 6 of clubs
1
c. Getting a 3 or a diamond P(6 of c lub s) =
d. Getting a 3 or a 6 52

Elementary Statistics by A. G. Bluman

 Examples of Probability:
Example 3: Solution:
A card is drawn from an ordinary deck. Find these c. Since there are four 3s
probabilities. and 13 diamonds, but the 3
a. Getting a Jack of diamonds is counted
twice in this listing. Hence,
b. Getting the 6 of clubs there are 16 possibilities of
c. Getting a 3 or a diamond drawing a 3 or a diamond,
d. Getting a 3 or a 6 so,
16 4
P(3 or diamond) = =
52 13

This is an example of the

“inclusive or”.
Elementary Statistics by A. G. Bluman
 Examples of Probability:
Example 3: Solution:
A card is drawn from an ordinary deck. Find these d. Since there are four 3s
probabilities. and four 6s, so
a. Getting a Jack 8 2
P(3 or 6) = =
b. Getting the 6 of clubs 52 13
c. Getting a 3 or a diamond
d. Getting a 3 or a 6 This is an example of the
“exclusive or”.

Elementary Statistics by A. G. Bluman

The following illustrates experiments, sample space, events,
and probabilities:
Experiment Sample Space S Suppose Event E is Probability of E
Tossing a coin {H, T} {H} P(E) = ½
Tossing a single die {1, 2, 3, 4, 5, 6} {5, 6} P(E) = 1/3
{low (20%), medium (30%),
Demand {high} P(E) = 50%
high (50%)}
{approved (60%), not
Proposal {not approved} P(E) = 40%
approved (40%)}
{retain price (60%), increase
{competitor
Competitors price (25%), lower price P(E) = 15%
lowered price}
(15%)}
The following illustrates experiments, sample space, events,
and probabilities:
Experiment Sample Space S Suppose Event E is Probability of E

{exactly no heads} =
Tossing 2 coins {HH, TH, HT, HH} P(E) = ¼
{TT}
{doubles} =
Tossing a two dice {(1,1), (1,2), (1,3), …, (6,6)} P(E) = 1/6
{(1,1), (2,2), …, (6,6)}
A card from 52 p.c. {x/x is a card in 52 deck of pc} {getting a diamond} P(E) = 1/4
{(blue, blue), (green, green),
Getting 2 red balls {(red, red)} P(E) = 1/3
(red, red)}
Selecting a male {4 males, 5 females} {M1, M2, M3, M4} P(E) = 4/5
The following illustrates experiments, sample space, events, and
probabilities:
Experiment Sample Space S Suppose Event E is Probability of E
Sales: {high sales (0.75),
{high sales} P(E) = 0.75
High = 0.75, low= 0.25 low sales (0.25)}
{low (20%), moderate
Company backlog {moderate backlog} P(E) = 45%
(45%), high, worst (35%)}
{ 0 defective (10%), 1
defective (15%), 2
Defective Items {getting 3 defective
defectives (25%), 3 P(E) = 30%
Testing items}
defectives (30%), 4
defectives (20%) }
 Probability Rules:
Probability Rule 1:
The probability of any event E is a number (either a fraction or decimal) between
and including 0 and 1, denoted by
0  P(E)  3

Rule 1 states that probabilities cannot be negative or greater than 1.

Elementary Statistics by A. G. Bluman

 Probability Rules:
Probability Rule 2:
If an event E cannot occur (i.e., the event contains no members in the sample
space), its probability is 0.

1. When a single die is rolled, find the probability of getting a 9.

P(9) = 0
2. If there are 5 males and 6 females in the set of officers who are enrolled in
ELE BA or Internship only, what is the probability of selecting a female
enrolled in Business Ethics?
P(female enrolled in BE) = 0

Elementary Statistics by A. G. Bluman

 Probability Rules:
Probability Rule 3:
If an event E is certain, then the probability of e is 1.

When a single die is rolled, what is the probability of getting a number less than
7?
Solution:
Since all outcomes --- 1, 2, 3, 4, 5, and 6 --- are less than 7, then the probability is
given by
P(1, 2, 3, 4, 5, or 6) =6/6 = 1.
The probability of getting a 7 is certain to happen. This indicates that the
probability of a sample space is 1.
Elementary Statistics by A. G. Bluman
 Probability Rules:
Probability Rule 4:
The sum of the probabilities of all outcomes in the sample space is 1.

In the roll of a fair dice, each outcome in the sample space has a probability of
1/6. Hence , the sum of the probabilities of the outcomes is as shown.

Outcome 1 2 3 4 5 6 Sum
Probability 1/6 1/6 1/6 1/6 1/6 1/6 1

Elementary Statistics by A. G. Bluman

 Probability Rules:
In General, probability values range from 0 to 1. When the probability
of an event is close to 0, its occurrence is highly unlikely. When the
probability of an event is near 0.5, there is about 50-50 chance that the
event will occur, and When the probability of an event is close to 1, the
event is highly likely.

Elementary Statistics by A. G. Bluman

Categories of Probability (Jaggia & Kelly, 2021)
1. Subjective Probability
2. Empirical Probability
3. Classical Probability
Subjective Probability (Jaggia & Kelly, 2021)
Subjective Probability – is based on an individual’s personal judgement or
experience. This personal assessment of probability does not explicitly
reference any data. It differ from person to person and may contain a high
degree of personal bias.
Example:
• A manager may instinctively feel that 14% of consumers will respond
positively to the to the firm’s social media campaign.
• An expert assess that the Dow Jones Industrial Average (DJIA) might
change in the next year.
• An analyst thinks that pandemic will end in 6 to 8 months.
Empirical Probability (Jaggia & Kelly, 2021)
Empirical Probability – is a probability based on referenced data on the
observed outcomes of an experiment. It is calculated as a relative
frequency of occurrence. This probability is based on a sample data that it
is called empirical.
Example:
• If over a ten year period in a particular city, 152 restaurants out of 180
opened and closed within one year, and closure within 1 year is our
benchmark for failure, we can determine the empirical probability of
restaurant failures for the city as 152/180 = 0.84.
Note that the empirical probability is reliable if the experiment is run with a
very large number of times (trials is done n number of times).
Classical Probability (Jaggia & Kelly, 2021)
Classical Probability – is based on logical analysis rather than on
observation or personal judgement. Classical probabilities are based on the
assumption that all outcomes of an experiment are equally likely.
The classical probability of an event is computed as the number of
outcomes belonging to the event divided by the total numbers of
outcomes.
The illustrations presented on the next slide are examples of classical
probability.
Classical Probabilities:
Probability
Experiment Sample Space S Suppose Event E is
of E
Tossing 2 coins {HH, HT, TH, TT} {HH} P(E) = ¼
Tossing two dice {(1, 1), (1, 2), (1, 3), …, (6,6)} {x/x is doubled} = {(1, 1), (2, 2)…(6, 6)} P(E) = 6/36 = 1/6

Drawing a single
{13 hearts, 13, diamonds,
heart in 52 deck of {13 clovers} P(E) = 13/52=1/4
13 spades, 13 clovers}
p.c.
A roulette
consisting of {1, 2, 3, 4, 5 ,6} {numbers less than 3} P(E) = 2/6 = 1/3
numbers 1-6
{HHH, HHT, HTH, THH, TTH,
Tossing 2 coins {exactly 1 tail} P(E) = 3/8
THT, HTT, TTT}
 Exhaustive Events (Jaggia et al, 2021)

Exhaustive events – are events that includes all outcomes

in the sample space.
Example:
• Suppose Student grades S = {A, B, C, D}
• If the grades given to the students ranges between A
to D, then the event E is exhaustive.
• However, if the students grades turned to be ranging
from A to B only, then event E is not exhaustive
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Exhaustive Events (Jaggia et al, 2021)

Example:
• Suppose Student final grade remark S = {Passed,
Failed}
• If some students passed and some failed, then the
event E is exhaustive.
• However, if all students passed the course, then
event E is not exhaustive.
Equally Likely Events
• The outcomes in a sample space S are equally likely if each outcome
has the same probability of occurring. In general, if outcomes in
a sample space S are equally likely, then computing the probability of
a single outcome or an event is very straightforward.
• In many situations, outcomes are equally likely
(e.g., flipping coins, throwing dice, drawing a card etc.).
• Many probabilities, particularly in games of chance, can be calculated
by using an equally likely argument.
• However, many other probabilities, especially those in business
situations, cannot be calculated by equally likely arguments, simply
because the possible outcomes are not equally likely.
Mutually Exclusive Events (Jaggia & Kelly, 2021)
Mutually Exclusive Events – the occurrence of one event precludes the occurrence of
the other or events cannot can not happen together.
Example:
• A student cannot receive an A and a B on the same course, so A and B are mutually
exclusive events.
• A student can receive an A and a B on different courses, say A in ELE BA and B in
Economics, so A and B are non-mutually exclusive events.
• When drawing a single card in a deck of 52 playing cards, it is not possible to draw a
Jack and a Queen in just one draw, so Jack and Queen are mutually exclusive events.
• When drawing a single card in a deck of 52 playing cards, it is possible to draw a Jack
and a Diamond in just one draw of a card, so Jack and Diamond are non-mutually
exclusive events.
Mutually Exclusive Events (Jaggia & Kelly, 2021)
Example:
• From an experiment of tossing one die, if event A = {1, 2, 3} and event B = {4, 5,
6}, then when a die is tossed both A and B cannot happen at the same time,
thus, A and B are mutually exclusive events.
• From an experiment of tossing one die, if event A = {1, 2, 3} and event C = {2, 3,
4, 5, 6}, then when a die is tossed both A and C can happen at the same time
when 2 or 3 faces up, thus, A and C are non-mutually exclusive events.
• High demand and low demand are mutually exclusive events because only one
of these two possibilities can occur at one time.
• Approved and not approved proposal are mutually exclusive events.
• A government regulation may be amended or not amended are mutually
exclusive events.
Mutually Exclusive Events and Exhaustive Events
• The experiment on grades distribution in a particular course where the
grades are ranging from A to B are non-exhaustive and mutually exclusive
events.
• The experiment on grades distribution in a particular course where the
grades are ranging from A to D are exhaustive and mutually exclusive events.
• If there are three states of nature in a decision making problem: high,
moderate, low, then only one of them is possible to happen. So these events
are non-exhaustive and mutually exclusive events.
Combining Events (Jaggia & Kelly, 2021)
Union of Events A ꓴ B (Jaggia & Kelly, 2021)
The union of two events denoted by A ꓴ B – is the event consisting of all
the outcomes in A or B. The elements contained in A or B are the combined
elements of the two events.

The rectangle represents the sample space S and the two circles
represents events A and B.
Union and Intersection of Events A Ո B
(Jaggia & Kelly, 2021)
The intersection of two events denoted by A Ո B – is the event consisting
of all the outcomes in A and B. The elements in A and B are the common
outcomes of the two events.

The rectangle represents the sample space S and the two circles
represents events A and B.
Complement of Event A (Jaggia & Kelly, 2021)
The Complement of event A denoted by Ac or A’ – is the event consisting of
all outcomes in the sample space S that are not in A.

Ac

The rectangle represents the sample space S and the circle represents
event A.
Two Defining Properties of Probability (Jaggia & Kelly, 2021)
20 item - Quick assessment
After studying this module, a 20 item – quick assessment must be
accomplished in the blackboard on Sept. 11, 2021, 8 pm.
Reference
Business Analytics: Communicating with Numbers by Jaggia, S., Kelly, A.,
Lertwachara, K. and Chen, L.
Copyright 2021 by McGraw-Hill Education.

Probability and Statistics by Walpole, R., Myers R., and Myers S. Prentice Hall
International, Inc., 1998.

Elementary Statistics by Allan G. Bluman. McGraw Hill International Edition, 2010

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