MAT 325 – SP24 Dr.

Hage

PROBABILITY: DEFINITIONS AND PROPERTIES

1. Basic Definitions and Axioms of Probability:

A random experiment or simply an experiment is a process whose outcomes cannot be predicted

with certainty. Examples of an experiment include rolling a die, flipping a coin, and choosing a
card from a deck of playing cards.
The sample space S of an experiment is the set of all possible outcomes for the experiment. For
example, if you roll a die one time then the experiment is the roll of the die. A sample space for
this experiment is S = {1, 2, 3, 4, 5, 6} where each digit represents a face of the die.
An event is a subset of the sample space. For example, the event of rolling an odd number with a
die consists of three outcomes {1, 3, 5}: An event consisting of a single outcome is called a
single event. An event with no outcomes is called an impossible event.

Example:
Consider the random experiment of tossing a coin three times.
(a) Find the sample space of this experiment.
(b) Find the outcomes of the event of obtaining more than one head.
Solution:

We will use T for tail and H for head.

(a) The sample space is composed of eight outcomes:
S = {TTT, TTH, THT, THH,HTT,HTH,HHT,HHH}
(b) The event of obtaining more than one head is the set
{THH,HTH,HHT,HHH}

Probability is the measure of occurrence of an event.

Empirical probability which uses the relative frequency of an event:

Let 𝛼 (E) denote the number of times in the first n repetitions of the experiment that the event E
occurs. Then P(E), the probability of the event E is:
𝛼(𝐸)
𝑃(𝐸) = lim
→ 𝑛
(Law of large number)

Theoretical or classical probability concept applies only when all possible outcomes are equally
likely, in which case the probability of an event E is given by the formula:
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑢𝑡𝑐𝑜𝑚𝑒𝑠 𝑓𝑎𝑣𝑜𝑟𝑎𝑏𝑙𝑒 𝑡𝑜 𝑒𝑣𝑒𝑛𝑡 #(𝐸)
𝑝(𝐸) = =
𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑢𝑡𝑐𝑜𝑚𝑒𝑠 #(𝑆)

The function P satisfies the following axioms, known as Kolomogorov's axioms:

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MAT 325 – SP24 Dr. Hage

(𝑃 ): 𝑓𝑜𝑟 𝑎𝑛𝑦 𝑒𝑣𝑒𝑛𝑡𝑠 𝐸, 0 ≤ 𝑃(𝐸) ≤ 1

(𝑃 ): 𝑃(𝑆) = 1
(𝑃 ): 𝑓𝑜𝑟 𝑎𝑛𝑦 𝑠𝑒𝑞𝑢𝑒𝑛𝑐𝑒 𝑜𝑓 𝑝𝑎𝑖𝑟𝑤𝑖𝑠𝑒 𝑚𝑢𝑡𝑢𝑎𝑙𝑙𝑦 𝑒𝑣𝑒𝑛𝑡𝑠 𝑜𝑟 𝑑𝑖𝑠𝑗𝑜𝑖𝑛𝑡 𝑒𝑣𝑒𝑛𝑡 {𝐸 } 𝑡ℎ𝑎𝑡 𝑖𝑠 𝐸
∩ 𝐸 = ∅ 𝑓𝑜𝑟 𝑖 ≠ 𝑗 𝑤𝑒 ℎ𝑎𝑣𝑒:

𝑃 𝐸 = 𝑃(𝐸 ) (𝑐𝑜𝑢𝑛𝑡𝑎𝑏𝑙𝑒 𝑎𝑑𝑑𝑖𝑡𝑖𝑣𝑖𝑡𝑦)

Any function P that satisfies Axioms (P1)- (P3) will be called a probability measure. Hence, a
classical probability is a probability measure. However, the converse is false

Example:
Consider the sample space S = {1; 2; 3}: Suppose that 𝑃({1,2}) = 0.5 and 𝑃({2, 3}) = 0.7 Is
P a valid probability measure? Justify your answer.
We must have 𝑃(𝑆) = 𝑃 ({1}) + 𝑃 ({2}) + 𝑃({3}) = 1
But 𝑃 ({1; 2}) = 𝑃 ({1}) + 𝑃({2}) = 0.5 𝑡ℎ𝑢𝑠 0.5 + 𝑃({3}) = 1 𝑜𝑟 𝑃({3}) = 0.5.
Similarly, 1 = 𝑃({2; 3}) + 𝑃({1}) = 0.7 + 𝑃({1}) and so 𝑃({1}) = 0.3
It follows 𝑃({2}) = 1 − 𝑃({1}) − 𝑃({3}) = 1 − 0.3 − 0.5 = 0.2.
We can easily verify Kolmogorov's axioms for this P. Hence, P is a valid probability measure but
not a classical probability since the outcomes are not equally likely

If P is a probability measure, then:

i. 𝑃(∅) = 0
ii. 𝑖𝑓 {𝐸 , 𝐸 , … , 𝐸 } 𝑖𝑠 𝑎 𝑓𝑖𝑛𝑖𝑡𝑒 𝑠𝑒𝑡 𝑜𝑓 𝑝𝑎𝑖𝑟𝑤𝑖𝑠𝑒 𝑚𝑢𝑡𝑢𝑎𝑙𝑙𝑦 𝑒𝑥𝑐𝑙𝑢𝑠𝑖𝑣𝑒 𝑒𝑣𝑒𝑛𝑡𝑠 𝑡ℎ𝑒𝑛

𝑃 𝐸 = 𝑃(𝐸 )

iii. 𝑃(𝐸 ) = 1 − 𝑃(𝐸)𝑤ℎ𝑒𝑟𝑒 𝐸 𝑖𝑠 𝑡ℎ𝑒 𝑐𝑜𝑚𝑝𝑙𝑒𝑚𝑒𝑛𝑡𝑎𝑟𝑦 𝑒𝑣𝑒𝑛𝑡

Example:
What is the probability of drawing an ace from a well-shuffled deck of 52 playing cards?
Solution
Since there are four aces in a deck of 52 playing cards, the probability of getting an ace is P(Ace)
=4/52=1/13

Example:
What is the probability of rolling a 3 or a 4 with a fair die?
Solution
The event of having a 3 or a 4 is the event E = {3; 4}: The probability of rolling a 3 or a 4 is
P(E)=2/6 =1/3
Example:

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In a room containing n people, calculate the probability that at least two of them have the same
birthday.
Solution:
Assume all years are non-leap years.
In a group of n randomly chosen people, the sample space S is the set
S = {i , i , … , i | 1 ≤ i ≤ 365; k + 1,2, … , n}
n
Hence, #(S) = 365 .
Let E be the event that at least two people share the same birthday. Then the complementary
event Ec is the event that no two people of the n people share the same birthday. Moreover,
𝑃(𝐸 ) = 1 − 𝑃(𝐸)
c
The outcomes in E are permutations of n numbers chosen from 365 numbers without repetitions.
Therefore
#(𝐸 ) = 𝑝 = (365)(364) … (365 − 𝑛 + 1)
Hence,
(365)(364) … (365 − 𝑛 + 1)
𝑃(𝐸 ) =
(365)
Thus,
(365)(364) … (365 − 𝑛 + 1)
𝑃(𝐸) = 1 − 𝑃(𝐸 ) = 1 −
(365)

2. Case of union and intersection:

Reminder:

 The union of two events A and B is the event 𝐴 ∪ 𝐵 whose outcomes are either in A or in
B.
 The intersection of two events A and B is the event 𝐴 ∩ 𝐵 whose outcomes are outcomes
of both events A and B.
 Two events A and B are said to be mutually exclusive if they have no outcomes in
common. In this case 𝐴 ∩ 𝐵 = Φ; and P (𝐴 ∩ 𝐵) = P (Φ) = 0.

Theorem 2.1:

Let A and B be two events. Then

P(A ∪ B) = P(A) + P(B) − P(A ∩ B)

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Let A ∩ B denote the event whose outcomes are the outcomes in B that are not in A:

B = (A ∩ B) ∪ (A ∩ B) and A ∪ B = A ∪ (A ∩ B)

(A ∩ B)and(A ∩ B)are mutually exclusive then P(B) = P(A ∩ B) + P(A ∩ B) thus

P(A ∩ B) = P(B) − P(A ∩ B)

A and (A ∩ B) are mutually exclusive then P(A ∪ B) = P(A) + P(A ∩ B) thus

P(A ∪ B) = P(A) + P(B) − P(A ∩ B)

Note that in the case A and B are mutually exclusive, P (A ∩ B) = 0 so that

P(A ∪ B) = P(A) + 𝑃(𝐵)

Example

An airport security has two checkpoints. Let A be the event that the first checkpoint is busy, and
let B be the event the second checkpoint is busy. Assume that P (A) = 0:2; P (B) = 0:3 and
P(𝐴 ∩ 𝐵) = 0:06: Find the probability that neither of the two checkpoints is busy.

𝑃((𝐴 ∪ 𝐵) ) = 1 − 𝑃(𝐴 ∪ 𝐵) = 1 − [𝑃(𝐴) + 𝑃(𝐵) − 𝑃(𝐴 ∩ 𝐵)] = 1 − (0.2 + 0.3 − 0.06)

= 1 − 0.44 = 0.56

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If E and F are two events such that E ⊂F; then F can be written as the union of two mutually
exclusive events F = E ∪ (E ∩ F) thus

P(F) = P(E) + P(E ∩ F) thus P(F) − P(E) = P(E ∩ F) ≥ 0 and this show that E ⊂F thus
P(E) ≤P(F)

Theorem 2.2:

For any three events A,B, and C we have

P(A ∪ B ∪ C) = 𝑃(𝐴) + 𝑃(𝐵) + 𝑃(𝐶) − 𝑃(𝐴 ∩ 𝐵) − 𝑃(𝐴 ∩ 𝐶) − 𝑃(𝐵 ∩ 𝐶) + 𝑃(𝐴 ∩ 𝐵 ∩ 𝐶)

𝑃(𝐴 ∪ 𝐵 ∪ 𝐶) = 𝑃(𝐴) + 𝑃(𝐵 ∪ 𝐶) − 𝑃 𝐴 ∩ (𝐵 ∪ 𝐶)

= 𝑃(𝐴) + 𝑃(𝐵) + 𝑃(𝐶) − 𝑃(𝐵 ∩ 𝐶) − 𝑃 (𝐴 ∩ 𝐵) ∪ (𝐴 ∩ 𝐶)
= 𝑃(𝐴) + 𝑃(𝐵) + 𝑃(𝐶) − 𝑃(𝐵 ∩ 𝐶)
− 𝑃(𝐴 ∩ 𝐵) + 𝑃(𝐴 ∩ 𝐶) − 𝑃 (𝐴 ∩ 𝐵) ∩ (𝐴 ∩ 𝐶)
= 𝑃(𝐴) + 𝑃(𝐵) + 𝑃(𝐶) − 𝑃(𝐵 ∩ 𝐶) − 𝑃(𝐴 ∩ 𝐵) − 𝑃(𝐴 ∩ 𝐶)
+ 𝑃 (𝐴 ∩ 𝐵) ∩ (𝐴 ∩ 𝐶)
= 𝑃(𝐴) + 𝑃(𝐵) + 𝑃(𝐶) − 𝑃(𝐵 ∩ 𝐶) − 𝑃(𝐴 ∩ 𝐵) − 𝑃(𝐴 ∩ 𝐶) + 𝑃 (𝐴 ∩ 𝐵 ∩ 𝐶)

3. Probability and Counting Techniques

Example:

In an actuarial course in probability, an instructor has decided to give his class a weekly quiz
consisting of 5 multiple-choice questions taken from a pool of previous SOA P/1 exams. Each
question has 4 answer choices, of which 1 is correct and the other 3 are incorrect.

(a) How many answer choices are there?

(b) What is the probability of getting all 5 right answers?

(c) What is the probability of answering exactly 4 questions correctly?

(d) What is the probability of getting at least four answers correctly?

Solution

(a) There are 4 ways to do each step so that by the Fundamental Principle of Counting there are:
(4)(4)(4)(4)(4) = 1024 𝑝𝑜𝑠𝑠𝑖𝑏𝑙𝑒 𝑐ℎ𝑜𝑖𝑐𝑒𝑠 𝑜𝑓 𝑎𝑛𝑠𝑤𝑒𝑟𝑠.

(b) There is only one way to answer each question correctly. Using the
Fundamental Principle of Counting there is (1)(1)(1)(1)(1) = 1 way to answer all 5 questions
correctly out of 1024 possible answer choices. Hence,
𝑃(𝑎𝑙𝑙 5 𝑟𝑖𝑔ℎ𝑡) = 1/1024

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(c) The following table lists all possible responses that involve exactly 4 right answers where R
stands for right and W stands for a wrong answer.
Five Responses Number of ways to fill out the test
WRRRR (3)(1)(1)(1)(1) = 3
RWRRR (1)(3)(1)(1)(1) = 3
RRWRR (1)(1)(3)(1)(1) = 3
RRRWR (1)(1)(1)(3)(1) = 3
RRRRW (1)(1)(1)(1)(3) = 3
So there are 15 ways out of the 1024 possible ways that result in 4 right answers and 1 wrong
answer so that
𝑃(4 𝑟𝑖𝑔ℎ𝑡, 1 𝑤𝑟𝑜𝑛𝑔) = 15/1024 = 1: 5%

(d) At least 4" means you can get either 4 right and 1 wrong or all 5 right.
Thus,
𝑃(𝑎𝑡 𝑙𝑒𝑎𝑠𝑡 4 𝑟𝑖𝑔ℎ𝑡) = 𝑃(4𝑅, 1𝑊) + 𝑃(5𝑅) = 15/1024 + 1/1024 = 16/1024 = 0.016

3.1 Probability Trees

Probability trees can be used to compute the probabilities of combined out-comes in a sequence
of experiments.
Example:
Construct the probability tree of the experiment of flipping a fair coin twice.

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MAT 325 – SP24 Dr. Hage

Example
A shipment of 500 DVD players contains 9 defective DVD players. Construct the probability
tree of the experiment of sampling two of them without re- placement.

Example:
The faculty of a college consists of 35 female faculty and 65 male faculty. 70% of the female
faculty favor raising tuition, while only 40% of the male faculty favor the increase.
If a faculty member is selected at random from this group, what is the probability that he or she
favors raising tuition?

𝑃(𝑡𝑢𝑖𝑡𝑖𝑜𝑛 𝑟𝑎𝑖𝑠𝑒) = 0.245 + 0.26 = 0.505

Example:
A regular insurance claimant is trying to hide 3 fraudulent claims among 7 genuine claims. The
claimant knows that the insurance company processes claims in batches of 5 or in batches of 10.
For batches of 5, the insurance company will investigate one claim at random to check for fraud;
for batches of 10, two of the claims are randomly selected for investigation. The claimant has
three possible strategies:
(a) submit all 10 claims in a single batch,

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