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Probability 1

The document discusses the history and applications of probability including insurance, business decisions, medical decisions, politics, and sports. It defines key probability concepts such as events, sample space, mutually exclusive events, and collectively exhaustive events. It also covers different approaches to probability including classical, relative frequency, and subjective approaches.

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Sumant Rajput
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69 views2 pages

Probability 1

The document discusses the history and applications of probability including insurance, business decisions, medical decisions, politics, and sports. It defines key probability concepts such as events, sample space, mutually exclusive events, and collectively exhaustive events. It also covers different approaches to probability including classical, relative frequency, and subjective approaches.

Uploaded by

Sumant Rajput
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Jacob Bernoulli (1654–1705), Abraham de Moivre (1667–1754), the Reverend Thomas Bayes (1702–

1761), and Joseph Lagrange (1736–1813)

Application: Insurance industry

70 percent chance of rain, we change our plans from a picnic to a pool game.

Managers who deal with inventories of highly styled women’s clothing must wonder about the
chances that sales will reach or exceed a certain level, and the buyer who stocks up on skateboards
considers the probability of the life of this particular fad.

https://azbigmedia.com/lifestyle/consumer-news/the-truth-about-palm-reading-revealed/

Medical Decisions – When a patient is advised to undergo surgery, they often want to know the
success rate of the operation which is nothing but a probability rate. Based on the same the patient
takes a decision whether or not to go ahead with the same.

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.

Sports: To decide what are the chances of winning or losing of a particular team based on their
previous record. Similarly, the probability is put to use in order to devise the sports strategy also. For
instance, by tracking the record of a batsman in cricket, it is decided at what place or rank, he should
play.

https://www.stat.berkeley.edu/~aldous/Top_Ten/talk.html

Lottery tickets

Deterministic Models and Random or Probabilistic Models. Deterministic Models cover those
situations, where everything related to the situation is known with certainty to the decision-maker,
when decision is to be made. Whereas in Probabilistic Models, the totality of the outcomes is known
but it cannot be certain, which particular outcome will appear.So, there is always some uncertainty
involved in decision-making.

In general, probability is the chance something will happen.

Probability can also be defined as a measure of uncertainty.

In probability theory, an event is one or more of the possible outcomes of doing something. If we toss
a coin, getting a tail would be an event, and getting a head would be another event.

The activity that produces such an event is referred to in probability theory as an experiment

The set of all possible outcomes of an experiment is called the sample space for the experiment.

Events are said to be mutually exclusive if one and only one of them can take place at a time.

The crucial question to ask in deciding whether events are really mutually exclusive is, “Can two or
more of these events occur at one time?” If the answer is yes, the events arenot mutually exclusive.
When a list of the possible events that can result from an experiment includes every possible outcome,
the list is said to be collectively exhaustive. In our coin example, the list “head and tail” is collectively
exhaustive (unless, of course, the coin stands on its edge when we toss it). In a presidential campaign,
the list of outcomes

Types:

1. Classical approach

2. Relative frequency approach

3. Subjective approach

Classical probability is often called a priori probability because if we keep using orderly examples
such as fair coins, unbiased dice, and standard decks of cards, we can state the answer in advance (a
priori) without tossing a coin, rollinga die, or drawing a card.

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