AAMS1773 QUANTITATIVE STUDIES

CHAPTER 3: PROBABILITY
TERMS USED IN PROBABILITY THEORY
• Experiment
In probability term, an experiment is defined as a process
which generates a well-defined outcome that is not
predictable in advance, but where all possible outcomes are
known.
• Sample space, S
When we write down all the possible outcomes of our
experiment, we have defined the sample space of the
experiment. The possible outcomes in S are listed in curly
brackets, { }.

Example:
Experiment Sample space
Selecting an item off an
assembly line for inspection S = {Defective, Non-defective}
Throwing a coin S = {Head, Tail}
Tossing two coins S = {(H,H), (H,T), (T,H), (T,T)} Demand for
a new item S = {0, 1, 2, 3, 4,…, ∞} Rolling a dice once S =
{1, 2, 3, 4, 5, 6}
Rolling a pair of dice S = { (1,1), (1,2), (1,3), (1,4), (1,5), (1,6) (2,1),
(2,2), (2,3), (2,4), (2,5), (2,6)
(3,1), (3,2), (3,3), (3,4), (3,5), (3,6)
(4,1), (4,2), (4,3), (4,4), (4,5), (4,6)
(5,1), (5,2), (5,3), (5,4), (5,5), (5,6)
(6,1), (6,2), (6,3), (6,4), (6,5), 6,6)}

• Events
An event is a set of outcomes which satisfies a given
condition. It is a subset of the sample space. The event is said
to have occurred if the outcome of the experiment (when it is
 performed) is contained in the event set.

Chapter 3 – Page 1
Example:
Experiment Possible events
(a) Rolling a die Event A = obtaining a 5 = {5}
Event B = obtaining an even number = {2, 4, 6}

(b) Tossing two Event C = getting at least 1 head = {HT, TH, HH}
coins Event D = getting exactly 1 head = {HT, TH}

(c) Demand for a Event E = demand > 8 = {9, 10, 11,…, ∞}

new product

• Venn diagram
A Venn diagram is a simple pictorial representation of the
relationships between events.

S
Events

• Complement of an event
The complement of an event A is the event that A does not
occur. It is denoted by contained in event A. Either A
Aand contains all the or
experimental A is
outcomes that are not
certain to occur when the experiment is carried out as both
events together contain all the outcomes in the sample space.
 S

AA

Chapter 3 – Page 2
• Union of Events
Let A and B be two events defined in a sample space. The
union of events A and B is the collection of all outcomes that
belong
either to A or B or to both A A B∪ .
and B and is denoted by
S AB

• Intersection of Events
Let A and B be the two events defined in a sample space. The
intersection of A and B represents the collection of all outcomes
that are common to both A A B∩ .
and B and is denoted by

S
 A B

PROBABILITY, P

➢ Probability is a measurement of the likelihood (or chance,

possibility, proportion) of an event will occur in a given
sample space.
➢ Example of fact statements of probability:
(a)There is a 30% chance that this job will not be finished in
time.
(b)There is no possibility of delivering the goods before
Tuesday.
➢ Notation: P(A) A will occur.
≡the probability that an event
➢ In statistics, probabilities are more commonly expressed as
proportions than as percentages.

Chapter 3 – Page 3
➢ Two properties of probability
o The sum of the probabilities of all possible outcomes
of an experiment must be one.
o The smallest value that probability can have is 0
(denoting impossibility) and the largest value it can
have is 1 (denoting a certainty). Thus,
0 ≤ P(A) ≤ 1
belong to event A ≡total
Let n(A) n(S) number of outcomes for the
Then, experiment
≡total number of outcomes
 n(A)
P(A)
=
The probability of an n(S)

event A, Example:

A fair die is thrown. Let E be the event “the number is odd” and
F be the event “the number is greater than 4”.
(i) State the sample space.
(ii) Find P(E) and P(F).

Solution:
(i) Sample space, S = { 1, 2, 3, 4, 5, 6 } ⇒ n(S) = 6
n(F) 2
F = { 5, 6 } ⇒ n(F) = 2
(ii) E = { 1, 3, 5 } ⇒ n(E) = 3
1
1 P(F)
n(E) 3 P(E)
===
===
n(S) 6 3
n(S) 6 2
 Chapter 3 – Page 4
LAWS OF PROBABILITY

A. The Complement Rule

If of A then P(
Ais the complementary event A) = 1 – P(A).

B.The Addition Rule

Let A and B to be two events defined in a sample space S.
Probability of either event A or B or both A and B happen
= P (A ∪ B)
Mutually Exclusive Events Non-mutually Exclusive Events

cannot happen at the Can happen at the same time, i.e.

same time, i.e. their outcomes in common not mutually
respective event sets do exclusive.
not overlap.

P(A U B) = P(A) + P(B) P(A U B) = P(A) + P(B) – P(A ∩ B)

 Note:
In general, if A1, A2, … , An are mutually exclusive events then
P(A1 ∪ … ∪An) = … + P(An)
∪A2 P(A1) + P(A2) +

Chapter 3 – Page 5
Example:
There are 25 students in a class. 5 of them scored A and 10 of
them scored B while the others scored C in Quantitative Studies. If
a student is selected at random, what is the probability that the
selected student scored A or B in Quantitative Studies?

Solution:
Let A Let B ≡students scoring B in
≡students scoring A in Quantitative Studies
Quantitative Studies

P(A) =

P(B) =

P(A B) =
∪

Example:
In a business course in a college, 90% of the students passed
Statistics, 95% of the students passed Management and 88%
passed both Statistics and Management. A student is selected at
random.
(a) What is the probability that the student passed Statistics or
Management?
(b) What is the probability that the student passed neither
Statistics nor Management?

Solution
Let T M ≡the students
≡the students passed Management
passed Statistics

Given P(T) = 0.90, P(M) = 0.95, P(T∩M) = 0.88

(a) (b) P(T M)
P(T M) = ∪
=∪

Chapter 3 – Page 6
Alternative Solution 1:
S

TM

0.88

Refer to the Venn diagram above,

(a) (b) P(T M) = 1 0.02 0.88

P(T M) = 0.02 0.88 0.07 = 0.03 ∪ − − −

0.07 0.97 ∪ + + =

C. Conditional Probability
When an event happens is considered with the condition that
another event happens, then the event is a conditional event. The
conditional probability of the occurrence of event B given that
event A has occurred, denoted by P(B | A) is defined by
P(A ∩B) P(A)
P(B | A) =
Example: if P(A) > 0

The probabilities that a student will fail Accounting, Mathematics,

or both are P(A) = 0.20, P(M) = is the probability that
0.15, and P(A respectively. What M) = 0.03

(a) he will fail Accounting given that he has failed Mathematics?

(b) he will fail Mathematics given that he has failed Accounting?
(Answer: (a) 0.20, (b) 0.15)

Solution:
(a)

(b)
Chapter 3 – Page 7
Note: (1) If P(A) = 0 then P(B | A) is not defined. (2) If
A and B are independent then
P(B | A) = P(B )
 P(A | B) = P(A)

D. The Multiplication Rule

Let A and B to be two events defined in a sample space S.
Independent Events Dependent Events

Two events A and B are said If A and B are dependent

to be independent if the events then the outcome of B
occurrence of event A does depends upon the outcome
not affect the occurrence of of A.
event B and vice versa.
E.g. E.g.
A = passing your exam A = passing your exam.
B = throwing a coin getting B = graduating from
‘H’ A and B are college. A and B are
independent dependent
P(A ∩ B) = P(A) P(A ∩ B) = P(A)
×P(B) ×P(B | A)

Note:
(1) In general, if A1 , A2 , … , An are independent events then
P(A1 ∩…∩An ) = P(A1) P(An)
∩A2 x P(A2) x … x
(2) Independent events are not mutually exclusive, i.e. the two
events can occur together.
(3) Dependent events may or may not be mutually exclusive.

Example:
Students take two independent tests. 30% of the students pass
test A and 60% pass test B. Find the probability that a student
selected at random will pass
a) both tests b) only test A c) only one test (Answer: (b) 0.12
(c) 0.54)
Chapter 3 – Page 8
Solution:
A B P(A) = 0.3 P(B) = 0.6
⇨ P( ⇨ P(
pass test A ⇨
≡ pass test B ⇨ A) = 0.7 B) = 0.4
≡
B) = P(A) b) B)
a) P(A ∩ ×P(B) P(A ∩ B) = P(A) ×P(
= 0.3 ×0.6 = 0.3 ×0.4
= 0.18
=
B) + P( A∩ B) = ×P(B) + P( A) ×P(B)
c)
P(A ∩ P(A)
= 0.3 ×0.6
= Example:
×0.4 + 0.7

A bag contains five red balls and eight yellow balls. If two balls are
drawn consecutively and without replacement, what is the
probability that
(a) both are yellow?
(b) both are of different colours?
(c) both are red?
(Answer: (a)14/39, (b) 20/39, (c) 5/39)

Solution:
(a)

(b)
(c)

Chapter 3 – Page 9
Example
Given P(G) = 0.5, P(H) = 0.4 and P(G and H) = 0.1.
(a) Draw a Venn diagram and calculate
i) P(G | H) ii) P(H | G) iii)
P(H )
iv) P(G or H) v) H)

P(G or
b) Are the events G and H mutually exclusive? Explain. c) Are
the events G and H independent? Explain. (Answer: (a) (i) 0.25,
(ii) 0.20, (iii) 0.6, (iv) 0.8, (v) 0.7, (b) No, (c) No)

Solution:
(a)
S
 GH
(i) (ii) (iii) (iv) (v)

b)

c)

Chapter 3 – Page 10
TREE DIAGRAM
⇨ Is a graphical aid to help us visualize problems involving
combinations of trials. It can be used whenever the probability
of each stage of the outcomes is dependent on the previous
one or not.
⇨ A useful way for portraying conditional and joint probabilities.
⇨ Each outcome is represented by a branch of the tree.

Example:
Draw the probability tree for the experiment of tossing a coin 3
times. Find the sample space for this experiment.

Solution:
First toss Second toss Third toss Final outcomes

H HHH
HT
HHT
H
T
 HTT

H THH
T
H HTH T
HT
THT
T

H TTH
T
TTT
S = { HHH, HHT, HTH, HTT, THH, THT, TTH, TTT }

Chapter 3 – Page 11
Bayes’ Theorem
Suppose that A and B are mutually exclusive events that exhaust
the sample space of an experiment associated with them, i.e. A ∩
B= ∪B = S. P(A) known.
φand A and P(B) are

If D is the actual outcome of an experiment where

D = ∩D) ∩D).
(A ∪(B
P(D| A) and P(D| B) are known, then Bayes’ theorem enables us
to calculate
(a) P(D) = ∩D)
P[(A ∪(B ∩D)]
= P (A P(B
∩D) + ∩D)
 = P(A) x P(D | A) + P(B) x P(D | B)
The above is known as the theorem of total
probabilities.
P(A D) P(A) P(D | A)
∩×
(b) P(A | D) = P(D | B) × ×
=
P(D) P(A) P(D | A) + P(B)
which is known as posterior probability.

Example:
In a certain college, the girls constitute 60% of the student
population. 25% of the boys and 10% of the girls are studying
Statistics. If a student is selected at random, determine the
probability that the student is
(a) a girl and studying Statistics,
(b) a boy and studying Statistics,
(c) studying Statistics,
(d) a girl given that the student studying Statistics.
(Answer: (a) 0.06, (b) 0.10, (c) 0.16, (d) 0.375)

Solution:
G
≡the student is a girl ⇨ P(G) = 0.60 B
≡the student is a boy ⇨ P(B) = 0.40
T
≡the student is studying Statistics ⇨ P(T | B) = 0.25 ⇨
P(T | G) = 0.10

Chapter 3 – Page 12
Gender Conditional
��
Probabilitie
��(��|��) = 0.10
s
 ��
��(��) = 0.60

��̅ ̅
��(�� ∩ ��) = 0.60 × 0.90
̅
��(��|��) = 0.90
�� = 0.54 ��(�� ∩ ��) = 0.40
��(��|��) = 0.25 × 0.25 = 0.10
Joint Probabilities

��(�� ∩ ��) = 0.60 × 0.10 = 0.06

��(��) = 0.40

̅
��(��|��) = 0.75
(c)

(a) ��̅
̅
(d) ��(�� ∩ ��) = 0.40 ×
�� 0.75 = 0.30
(b)
 Chapter 3 – Page 13
Example:
A manufacturer purchases a particular component from three
suppliers: A, B, and C. 30% of the components are purchased
from A, 20% from B and 50% from C. It is learned that 3% of the
components from A, 5% from B and 4% from C are defective.
When the components arrive, they are placed directly in a bin and
not inspected or identified by supplier. Draw a well-labelled
probability tree diagram with the joint probabilities calculated to
illustrate this situation. Determine the probability that a randomly
selected component is

(a) from B and defective,

(b) defective,
(c) from B given it was defective,
(d) from B or found to be defective.
(Answer: (a) 0.01, (b) 0.039, (c) 0.2564, (d) 0.229)

Solution:
A ≡ a component selected is purchased from A;
B ≡ a component selected is purchased from B;
C ≡ a component selected is purchased from C;
D ≡ a component is defective.

Chapter 3 – Page 14
Suppliers Conditional
Probabilities
��(�� ∩ ��) = 0.3 ×
�� 0.03 = 0.009
��(��|��) = 0.03 Joint Probabilities
��

��(��) = 0.3 ��(��) = 0.5 (b)

��(��) = 0.2
(a)
 0.2 × 0.05 = 0.010
̅
��(��|��) =
(c) 0.95 ��(��|��) ��̅ �� ̅
= 0.04 �� ��(�� ∩ ��) =
0.2 × 0.95 = 0.190
̅ ��(�� ∩ ��) =
(d) ��(��|��) = ��̅ 0.5 × 0.04 = 0.020
0.96
̅ ̅
��(��|��) = ��(�� ∩ ��) =
0.97 ��̅ ��
0.3 × 0.97 = 0.291 ̅
��(��|��) = ��(�� ∩ ��) =
��(�� ∩ ��) =
0.05 �� 0.5 × 0.96 = 0.480

Chapter 3 – Page 15
CONTINGENCY TABLE
A contingency table is a table in which all possible events (or
outcomes) for one variable are listed as row headings and all
possible events for a second variable are listed as column
headings. The value entered in each cell of the table is the
observed frequency of each joint occurrence.

Example:
The following contingency table describes 200 customers of an
electrical store according to age and gender.
Age Gender Total
Male (M) Female (F)
Under 30 (U) 60 50 110
30 & over (O) 80 10 90
Total 140 60 200

A person is selected randomly from the 200 customers.

(a) Find
(i) P(M), P(F), P(U) and P(O),
(ii) P(M∩U), P(F∩O), ∪O),
P(M∪U), P(F
(iii) P(U | M), P(M | U), P(O | F), P(F | O).
(b) Are the events “Age under 30 (U)” and “Male customer (M)”
mutually exclusive? Explain.
(c) Are the events “Age under 30 (U)” and “Male customer (M)”
independent? Explain.
(Answer (a) (i) 7/10, 3/10, 11/20, 9/20 (ii) 3/10, 1/20, 19/20, 7/10
(iii) 3/7, 6/11, 1/6, 1/9 (b) No (c) No)
 Chapter 3 – Page 16
Solution:

Probability rules:
1. ̅
P(A) = 1 – P(A)
2. P(A U B) = P(A) + P(B) if A and B are mutually exclusive

3. P(A U B) = P(A) + P(B) – P(A ∩ if A and B are non-mutually

B) exclusive

4. P(B|A) =P(A ∩ B)
P(A)

5. P(A ∩ B) = P(A) × P(B) if A and B are independent

6. ×P(B│A) if A and B are dependent

P(A ∩ B) = P(A)

7. P(At least 1) = 1 – P(None)

Chapter 3 – Page 17
AAMS1773 QUANTITATIVE STUDIES
Tutorial 3 (Probability)

1. If events A and B are such that they are independent and

P(A) = 0.3, P(B) = 0.5, find B mutually exclusive?
P(A B) ∩and events A and P(A B) ∪. Are
P(X) = 2 5,
P(X | Y) =1 2and
2. X and Y are two P(Y | X) = 2 3. Find
events such that
(a) P(X Y) ∩, (b) P(X Y) ∪ .
P(Y), and (c)

3. A businessman has two secretaries, A and B. The

probability that secretary A will be absent on any given
day is 0.08, the probability that secretary B will be absent
on any given day is 0.07, and the probability that they will
 both be absent on any given day is 0.02. Draw a Venn
diagram to represent the situation. Find the probability
that
(a) either or both secretaries will be absent on any given
day,
(b) secretary A absent only on any given day,
(c) neither of them will be absent on any given day.

4. A club has 200 members. As many as 50% of them play

baseball, 52% play tennis, 64% play golf and 18% play all
the three sports. 11 of the members play only baseball
and 22 of them play only tennis, while 57 of them play
both tennis and golf.
(a) Copy the following Venn diagram and show the
number of members clearly in the Venn diagram.
golf

baseball tennis

Chapter 3 – Page 18
(b) Find the probability that a randomly selected member
(i) plays either baseball or tennis but not both; (ii)
plays tennis, given that he/she does not plays golf.
(c) Are the events “play baseball” and “play golf”
independent? Explain.
5. A box contains 20 DVDs, 4 of which are defective. What is
the probability that both are defective if 2 DVDs are
selected consecutively and randomly from this box (a)
with replacement;
(b) without replacement?

6. Items leaving a production process are tested

automatically, but it is known that the test is not
completely reliable. Experience shows that 85% of the
output is satisfactory and 15% is defective. The
probability that a satisfactory item fails the automatic test
is 0.07 and the probability that a defective item fails the
automatic test is 0.97.
(a) Draw a well-labelled probability tree diagram with
joint probabilities calculated to illustrate this situation. (b)
Calculate the probability that a randomly selected item
leaving the process
(i) fails the test,
(ii) is defective given that it fails the test,
(iii) is satisfactory given that it does not fail the test,
(iv) Is satisfactory or it does not fail the test.

7. HL Bank records show that 75% of its car loans are

completely repaid. Analysis on the unpaid loans shows
that 85% loan applicants would have been employed at
their present job for less than two years. Of the repaid
loan, 25% loan applicants would have been employed at
their present job for less than two years.

Chapter 3 – Page 19
(a) Draw a well-labelled probability tree diagram with
joint probabilities calculated for the above problem. (b)
 What is the probability that a particular loan applicant
would have been employed at his or her present job for
less than two years?
(c) Given that a particular loan application has been
employed at his or her present job for only one year,
what is the probability that this person will repay the
loan?

8. One student is selected at random from a group of 100

known to consist of 70 full-time (40 female and 30 male)
students and 30 part-time (20 female and 10 male)
students. Event A is “the student selected is full-time” and
event C is “the student selected is female”.
(a) Construct a contingency table with summation of all
categories counted.
(b) Find the ∩C).
probability P(A
(c) Find the probabilities P(A), P(C) and P(A|C). Are
events A and C independent?

9. A company decides to check on the accuracy of invoicing.

Invoices are prepared by three clerks X, Y and Z. A
random sample of 1000 invoices is selected. 300 were
prepared by X, 300 by Y and 400 by Z. The table below
shows the number of errors of the 1000 invoices for X, Y
and Z respectively:
Accuracy Clerks
X Y Z Total
Error (E) 6 15 12 33
No Error (E) 294 285 388 967
Total 300 300 400 1000
 From the sample of 1000 invoices, one invoice was
selected. Calculate the probability that
(a) It was prepared by Z and contained an error.

Chapter 3 – Page 20
(b) It was prepared by Z or contained an error. (c) it was
prepared by Z given that it contained an error. (d) it
contained an error given it was prepared by Z. (e) it was
prepared by X or Y given that it contained no error.
(f) It contained no error if it was prepared by X or Y.

10. Eighty applicants for a job were assessed as either good

or poor for their oral and written communication skills.
The resulting assessments are given in the contingency
table below:
Oral Written Total
Good (GW) Poor (PW)
Good (GO) 17 21 38
Poor (PO) 12 30 42
Total 29 51 80

(a) From the table, find the probability that a randomly

selected applicant has:
(i) poor oral communication skill;
(ii) good written communication skill;
(iii) good oral and good written communication
skills;
(iv) good oral or good written communication skill;
(v) good written communication skill given that the
 applicant has good oral communication skill.
(b) Are the event “good oral and good written
communication skills” mutually exclusive? Explain. (c)
Are good oral and good written communication skills
independent? Explain.

Chapter 3 – Page 21
Answers:

1. 0.15, 0.65, No
2.(a) 4/15 (b) 8/15 (c) 2/3
3.(a) 0.13 (b) 0.06 (c) 0.87
4.(b) (i) 0.41 (ii) 0.6528 (c) Yes
5.(a) 1/25 (b) 3/95
6.(b)(i) 0.205 (ii) 0.7098 (iii) 0.9943 (iv) 0.8545 7.(b)
0.4 (c) 0.4688
8.(b) 2/5 (c) 7/10, 3/5, 2/3, No
9.(a) 0.012 (b) 0.421 (c) 0.3636 (d) 0.03 (e) 0.5988 10.(a) (i) 0.525
(ii) 0.3625 (iii) 0.2125 (iv) 0.625 (v) 0.4474 (b) No (c) No
Chapter 3 – Page 22