LECTURE 4: PROBABILITY

Here are some modern applications of probability Theory.

1. Casinos and Insurance Companies relies on probability theory to operate profitably.

2. Physicists use probability theory to describe nature at its most fundamental level.
3. Pharmaceutical companies use probability theory to determine if the new drug is better than an existing
drug.
4. Engineers use probability theory to model communication over a noisy channel.
5. Banks use probability theory to make decision on investments.
6. A manufacturer uses probability theory to determine if a lot of parts has met quality standards and is ready
to ship. Investment banks use probability theory to make investment decisions.
7. More mundanely, each of us has had occasion to check the weather forecast, which relies on probability
theory, before deciding what to wear on a given day. The list goes on and on.

But, in thousands year ago Human believed that nothing can be said about the future, which are perceive to be
inherently and unpredictable. The future was best left by the deities that exist that time.

HISTORY:

In 1654 a French noble man and gambler named “Chevalier De Mere” study a problem about “ Thinking of the
points”

Simple Case of the Problem of the Points Suppose that two gamblers each put up $50 as a wager on the following
game. A fair coin will be tossed five times. One gambler chooses heads and the other chooses tails. The gambler
whose chosen face occurs three times among the five tosses wins the game and collects the entire pot of $100 that
was wagered. The problem of the points is this: If, after three tosses, the game is interrupted and cannot be
completed, then how should the $100 pot be divided between the two gamblers?

EXPLANATION: there is two gambler who has a bet of $50 each. The game is tossing of coin for five times. One
gambler choose tail and the other is head. The gambler whose chosen face occurs three times among the five tosses
wins the game and collects the entire pot of $100 that was wagered.

The problem of the points is this: If, after three tosses, the game is interrupted and cannot be completed, then how
should the $100 pot be divided between the two gamblers?

Chevalier De Mere cannot solve the problem so in the summer of 1654, he proposed it to his friend, Blaise Pascal, a
brilliant French mathematician. Pascal was intrigued by this problem, and he wrote a letter describing it to his friend
and mentor, Pierre de Fermat, another outstanding French mathematician. Over the course of several months in
1654, Pascal and Fermat exchanged correspondence and laid the foundations of the modern theory of probability
while solving the problem of the points.
(If you are interested in learning more about this fascinating story, then take a look at Keith Devlin's book with the
enticing title The Unfinished Game: Pascal, Fermat, and the Seventeenth- Century Letter that Made the World
Modern.)

The theory of probability continued to be developed by its adherents after the momentous events of the summer of
1654, but the theory was looked upon with some skepticism by the mathematical community because it failed to
meet the high standards of rigor expected of a mathematical theory.

In 1933 when the great Soviet mathematician Andrey Kolmogorov promulgated the axioms for a theory of
probability that are generally used today.

WHAT IS PROBABILITY?

 "probability", a fundamental concept in mathematics that helps us quantify uncertainty and make
predictions about the likelihood of different events occurring.
 What exactly is "probability*"? In simple terms, it’s the measure of how likely an event is to happen.

TERMINOLOGY:

RANDOM EXPERIMENT

 Produces an outcome. Examples: tossing a coin, rolling a pair of dice or choosing cards to a Deck of cards.

SAMPLE SPACE

 The collection of all the possible outcomes to a random experiment.

 We may not be able to predict which face will land on top, but we do know the possible outcomes when we
roll the die.
 Represented by capital letters.

EXPECTED EVENT(Events Associated to any random experiment)

 Certain events that are of interest to us. Wanted outcome.

Example:

1. In an experiment of rolling a die. What is the probability of having the following:

A: the number rolled is even
B: the number rolled is at least 3
C: the number rolled is at most 5

(Die singular. Dice plural form.)

Experiment: Rolling a Die.

Sample Space: S= { 1 , 2, 3 , 4 ,5 , 6 } (possible outcome for a die)

Expected event:

A: the number rolled is even. E = { 2 , 4 , 6 }

B: the number rolled is at least 3. L={ 3 , 4 ,5 , 6 }(pinakamaliit ay 3)
C: the number rolled is at most 5. M= { 1 , 2, 3 , 4 ,5 }(pinakamataas ay 5)
Expected Event: Compliment of the expected event:

 we see that an event is just a collection of outcomes, that is, a subset of the sample space

COMPLIMENT OF EVENT

If A is an event within the sample space S of an experiment, the complement of A (which may be written as AC)
consists of all outcomes in S that are not in A.

Example:

Experiment: Rolling a Die.

Sample Space: S= { 1 , 2, 3 , 4 ,5 , 6 } (possible outcome for a die)

Expected event:

A: the number rolled is even. E = { 2 , 4 , 6 }

The compliment of the expected events are the outcome that are not in the expected event.

EC= { 1 , 3 ,5 }
Answers:

a. D ={5,6}; D c = {1 , 2 ,3 , 4 }

b. D ={6} (outcome), D c = {∅ }(Null meaning no outcome came out on D compliment), D ={ ∅ } and D c = { 4 }.

D = {1 , 2 ,3 , 4 }, The D compliment is more likely to happen because there is more possible outcome than
c
c.
the sets in D.

Answer:

The sample space is the collection of events therefore the Null set is the compliment of the sample space.

Assignment of Probability There is uncertainty about the outcome of the roll of a balanced die. We now want to
assign a number to each outcome that measures the likelihood that it will occur.

How to solve Probability?

The probability

The assigned number of the outcome is called probability. It gives numerical value to a particular outcome.

Uncertain Certain

The first requirement is that probability should be a number between 0 and 1.

o The closer the probability is to 1, the more likely is the outcome to occur.
o The closer the probability is to 0, the less likely is the outcome to occur.
o If an outcome has probability 1, then it is certain to occur.
o If an outcome has probability 0, then it is certain not to occur.
The second requirement that we shall insist on is that the sum of the probabilities of all the outcomes is 1.
This second requirement makes sense intuitively since at least one outcome must certainly occur each time
the experiment is performed.
Formula:

Example:

1. In an experiment of rolling a die. What is the probability of having the following:

A: the number rolled is even
B: the number rolled is at least 3
C: the number rolled is at most 5

(Die singular. Dice plural form.)

Experiment: Rolling a Die.

Sample Space: S= { 1 , 2, 3 , 4 ,5 , 6 } = 6 (possible outcome for a die)

Expected event:

A: the number rolled is even. E = { 2 , 4 , 6 }

B: the number rolled is at least 3. L={ 3 , 4 ,5 , 6 }(pinakamaliit ay 3)
C: the number rolled is at most 5. M= { 1 , 2, 3 , 4 ,5 }(pinakamataas ay 5)

Solve for the Probability:

CARDINALITY= Number of outcomes

¿ EXPECTED EVENT
P ( E )=
¿ SAMPLE SPACE

A: the number rolled is even. E = { 2 , 4 , 6 } = 3

3 1
P ( E )= ∨
6 2

B: the number rolled is at least 3. L={ 3 , 4 ,5 , 6 } = 4

 4 2
P ( E )= ∨
6 3

C: the number rolled is at most 5. M= { 1 , 2, 3 , 4 ,5 } = 5

5
P ( E )=
6

In terms of percentage:

A: the number rolled is even. E = { 2 , 4 , 6 } = 3

A = {1 , 3 , 5 }=3
c

3 1
P ( E )= ∨
6 2

B: the number rolled is at least 3. L={ 3 , 4 ,5 , 6 } = 4

B ={ 1 , 2 }=2
c

2 1
P ( E )= ∨
6 3

C: the number rolled is at most 5. M= { 1 , 2, 3 , 4 ,5 } = 5

c = {6 }=1
c

1
P ( E )=
6

Adding the probability of the expected events and its compliment is equal to 1.
I explain this above

Relative Frequency refers to the number of outcomes occurs. Normally used in survey or poll.

Interpretation of Probability Intuitively, the probability of an event is its long-term relative frequency. That is, if the
experiment is repeated many, many times, then the fraction of the times that the event occurs will approximate its
probability.

Example: if a fair coin is tossed thousands of times, we expect that the fraction of times that it lands heads will be
near 1/2. This is the so-called frequentist interpretation of probability.

Answer:

One minus the probability of A compliment.

1 – 0.23 = 0.77

The probability of event A is 0.77.

Example 4.2 (Solution to the Simple Case of the Problem of the Points) Recall the problem of the points that initiated
our study of probability. The game is interrupted after three tosses. Let us assume for the sake of definiteness that
heads (denoted by H) occurred twice and tails (denoted by T) occurred once in the three tosses. In how many ways
could the game be finished?
  There are two more tosses remaining, and thus there are four possible outcomes for the remaining tosses:
HH, HT, TH, and TT.
 All of these outcomes are equally likely because the coin is fair. The player who chose heads wins in three of
these four outcomes.
 So the player who chose heads should get 75% of the pot and the player who chose tails should get 25%.

Explanation:

a. The probability is 48 over 159, 48 is the total number of executive and 159 is the total number of people in
the company.
b. The probability of having republican is 55/159, 55 is the total number of republican.
c. The probability of having executive and democrat is 5/159, 5 is the total number of executive and democrat.

The word or in probability means inclusive or the other or both.

Answer:

a. A fair coin is tossed twice in succession and the face, either heads (H) or tails (T), that lands on top is
observed.

b. The probability of each outcome is ¼.

c. A={HT,TH} = 1, Ac ={HH , TT }
d. B={HH,TH,HT}=3 P(B)=3/4
Ac = {TT }=1 , P ( A c )=1 /4