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Understanding Probability: Statistical Method & Data Analysis

The document provides an overview of probability, defining it as the measure of the likelihood of events occurring, ranging from 0 to 1. It discusses the importance of probability in understanding randomness, making statistical inferences, and real-world decision-making across various fields such as finance and healthcare. The document also outlines different types of probability and their applications, emphasizing its role in interpreting data and managing uncertainty.

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8 views9 pages

Understanding Probability: Statistical Method & Data Analysis

The document provides an overview of probability, defining it as the measure of the likelihood of events occurring, ranging from 0 to 1. It discusses the importance of probability in understanding randomness, making statistical inferences, and real-world decision-making across various fields such as finance and healthcare. The document also outlines different types of probability and their applications, emphasizing its role in interpreting data and managing uncertainty.

Uploaded by

revanthkumar080307
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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UNDERSTANDING PROBABILITY

IN
STATISTICAL METHOD &
DATA ANALYSIS
Presented by: 03, 07, 22, 21.
OVERVIEW
01 02 03
Introductio Why Probability KEY
n ? Concept

04 05 06
Probability Application Conclusio
Types s n
INTRODUCTIO
N

What is FORMUL
PROBABILITY? A
• The measure of the likelihood that an event will PROBABILITY= No. of Favorable
occur. Outcomes/
Total No. of
• Values range from 0 (impossible) to 1
Outcomes.
(certain).
• Foundation for all statistical
inference.
Why
01 PROBABILITY?
🔍 1. Understanding Randomness
In real life, we deal with random events all the time—like
weather,
elections, or tossing a coin. Probability gives us a mathematical
way to
describe randomness.
2. Foundation of Statistical Inference
02 Most of statistics is about making predictions or decisions based on
data.
We use probability to:
• Estimate how likely our conclusions are correct
• Decide if what we see in data is just due to chance or
something real
5. Real-world Decision Making

03 Whether it's finance, sports, science, or AI—probability helps


people:
• Manage risk
• Make predictions
• Choose the best option based on data
KEY
Concept.
1. Experiment
A process or action that leads to a result (outcome)
that
cannot be predicted with certainty.
Example: Rolling a die, flipping a coin.
2. Sample Space (S)
The set of all possible outcomes of an
experiment.
Example: For a die, S = {1, 2, 3, 4, 5, 6}.
3. Event (E)
A subset of the sample space; a specific outcome or
group
of outcomes.
Example: E = {2, 4, 6} (rolling an even number).
Probability Types
• Based on logical reasoning and
Theoretic assumes all
• outcomes are equally likely.
al Used in games of chance like dice, cards,
• Based on actual data or or coins
Probabilit
experiments. Experimen
he probability is calculated after the y
event is ta
observed multiple times. • Based on personal judgment, opinion, or
Probability
Subjectiv • intuition—not on exact data.
• Common in real-world decision-making, like
e finance
• or forecasting.
• Based on a set of axioms (rules) defined by Probabili
Axiomati
mathematician Andrey Kolmogorov.
• Used in advanced theoretical statistics c ty
and modeling.
• It's the most mathematically rigorous Probabili
approach.
ty
Applicatio
ns 1. Weather Forecasting

• Meteorologists use probability to predict the


chance of
rain, storms, or snow.

2. Medicine & Healthcare

• Used in clinical trials to measure the effectiveness of new


drugs.
• Probability helps determine risk factors, disease spread,
and treatment success.

3. Finance and Insurance

• In investing, it helps assess the risk and return of a


portfolio.
• Insurance companies use probability to calculate
Conclusio
n
Probability is a fundamental concept in both statistics and
real
life. It allows us to measure uncertainty, predict outcomes,
and make informed decisions in situations where results
are
not guaranteed. From weather forecasting and medical
research
to business strategies and AI algorithms, probability helps
us understand patterns, evaluate risks, and
interpret
In short, data more
probability is accurately.
not just about
chance—
it's about making sense of the unknown.
T h a n k
y o u !
team
work

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