PROBABILITY THEORY 1.

What is Mutually exclusive event

Two events A and B are said to be mutually exclusive when both can not happen simultaneously. In other words, the happening of one prevents the happening of the other and vice versa i.e. only one event can occur at a time. Eg:: In tossing a coin either head or tail will appear both can not happen at the same time

2.What is not mutually exclusive event:

Two events A and B are said to be not mutually exclusive when both events can occur simultaneously. Eg: Driving the car and listening to the music

3.DEFINE THE FOLLOWING

1. Exhaustive events: All possible outcomes of an experiment is called an exhaustive event Eg: Tossing a coin Throwing a die Head ,Tail Getting number 1,2,3,4,5 & 6

2. Dependent event: The event which affect the probability of occurrence of the other event is called dependent eventi Eg: Getting admission and getting interview card. There are two events, getting an interview card and getting admission in a college . Only when the interview card is received there is a possibility of getting admission in a college 3.Independent event:

Events which do not affect the probability of occurrence of the other event then the two events are called independent events. Eg: Train departure time is independent of flight departure time. Getting head in the second toss is independent of getting head in the first toss 4.Marginal Probability: Probability of occurrence of a single event i.e. P(A)

5.Joint Probability: Probability of occurrence of two or more events Notation P(A) of occurrence of event A P() of non-occurrence of A Read as P of A P of A complement Probability Probability

Probability of getting head = Always P(A) +P()=1 Always ,

Probability of getting head = P( Not getting head ) = P(A) +P()=1/2+1/2=1

P(X=1)+P(X=2)+ P(X=3)+ P(X=4)+ P(X=5)+ P(X=6) = 1 Probability of getting No.1+Probability of not getting 1=1

[1/6+[1/6+1/6+1/6+1/6+1/6]]=1

Probability of getting head or tail 1/2+1/2

Notation

Read as

P(AB) and B P(B)

P of AB P of A compliment

Probability of occurrence of an event A

& B compliment Probability of non-occurrence of an event A & B P(A+B) B P of A plus B Probability of occurrence of an event A or

ADDITION THEOREM, FOR MUTUALLY EXCLUSIVE EVENT:

If A and B are said to be mutually exclusive events then P(A+B)=P(A) +P(B) This can be represented by a Venn diagram

Note: P(A+B) can also be written as P(AUB)

ADDITION THEOREM, FOR NOT MUTUALLY EXCLUSIVE EVENT:

If A and B are said to be not mutually exclusive events then

P(A+B)=P(A)+P(B)P(AB) This can be represented by a Venn diagram

If there are 3 events A,B,C and if these three events are not mutually exclusive P(A+B+C)= P(A)+P(B)+P(C)-P(AB)-P(BC)-P(CA)+P(ABC)

This can be represented by a Venn diagram

A B

Multiplication Rule:

If A and B are said to be independent events then, P(AB) = P(A)P(B)

Conditional probability: In the case of dependent events the multiplication theorem stated earlier is not applicable. If A and B are said to be dependent i.e. A can occur when B is known to have occurred or vice versa ,the probability attached to such an event is called conditional probability and is denoted by P(A/B) Read as P of A given B i.e. probability of occurrence of an event A given that B is known to have occurred

P(A/B) = P(AB)/ P(B)

or

P(AB)= P(A/B)P(B)

SIMILARLY P(B/A) = P(AB)/P(A) or P(AB)= P(B/A) P(A)

NOTE: If A and B are said to be independent then, P(A/B) = P(A) AND P(B/A)= P(B)

Probability - Problems:
1. A construction company is bidding for two contracts A and B. The probability that the company will get contract A is 3/5 and the probability of getting company B contract is 1/3 the probability of getting both the contract is 1/8 what is the probability that the company will get the contract A or B Ans: 0.805

2. If the probability is 0.30 that the management accountants applicant has a PG degree, 0.70 that he has work experience and 0.2 that he has both. Out of 200 applicants what number would have either a PG degree or some work experience Ans: 160

3. The probability that a contractor will get a plumbing contract is 2/3 and the probability that

he will not get an electric contract is 5/9. If the probability of getting at least one contract is 4/5. What is the probability that he will get both? Ans: 0.37 4. A charted accountant applies for a job in two firms X and Y. He estimates that the probability of being selected in firm X is 0.7 and being rejected at Y is 0.5 and the probability of at least one of his application being rejected is 0.6. what is the probability that he will be selected in one of the firms. Ans: 0.8 5. A husband and wife appear for an interview. The probability of husband getting selected is 1/7 and wife getting selected is 1/5. What is the probability that (a) both of them getting selected (b) none of them getting selected (c) only one of them getting selected. Ans: (a)1/35, (b) 24/35, (c) 2/7

a. The odds that A speaks the truth is 3:2 and that odd that B speaks the truth is 5:3. In what cases are they likely to contradict each other on an identical point. Ans:19/40 6. The odds against student X solving a business statistics problem are 8 to 6 and the odds in

favour of Y solving the same are 14 to 16. What is the probability that the problem will be solved if both try independently Ans: 0.695

7. The probability that A can solve a problem in business statistics is 4/5. B can solve the problem is 2/3. C can solve the problem is 3/7. If all of them trying independently find the probability that the problem will be solved. Ans: 0.961

8. A bag contains 6 white, 4 red and 10 black balls. 2 balls are drawn at random. Find the probability that both of them are black. Ans:0.236 9. A bag contains 8 white balls, 4 black balls. 5 balls are drawn at random. What is the probability that 2 of them are black and 3 are white? Ans: 0.424 10. A box contains 3 red, 7 white balls. 1 ball is drawn at random and in that place a ball of other colour is put in the box and now a ball is drawn from that box. Find the probability that it is red. Ans: 0.34 12 Two bags contain each 5 black and 4 white balls. A person draws a ball at random from the first bag and put it in the second bag and then he draws a ball

from the second bag. What is the probability that it is white? Ans: 4/9 13.Determine all the possible elements of a sample space when you are interested in finding out the probability in tossing of 3 coins Ans: 23=8

14.A coin is tossed 5 times (a) What is the probability of getting at least 3 heads. (b)What is the probability of getting at the most 2 heads?(this problem can be also can be solved by binomial distribution) Ans: 15.In a single throw of 2 dice (a) what is the probability of obtaining a total of at least 10?(3/6) (b) A can solve 90% of the problem given in a book and B can solve 70% What is the probability that at least one of them will solve the problem selected at random Ans: 16.Suppose a company hires both MBA and non MBAs and after a period of employment some are promoted and some are not. Table given below are the proportion of company managers among the said class. Status Promoted (B) Non Promoted A (MBA) 0.42 0.28 ( non MBA) 0.18 0.12 Total 0.60 0.40

(B bar) Total 0.70 0.30 1.00 Calculate: (i) P(A/B) [ans: 0.7] AND P(B/A)[ ans: 0.6] (ii) Find whether A and B are independent events [Ans: the two are independent] 17.On the basis of information given by a reliable source there was a plan for sudden raid by the government authority on some shops. The shops that were decided to be raided were 55 out of 100 in that area. The following is the estimated classification based on the information given below Goods Nonsmuggled [A] Smuggled [B] Total Big shop [C] 25 Small shop [D] 20 Total 45

35 60

20 40

55 100

Find P(C/A), P(A), P(B/D),P( A/D), P(B)

18.The personal department of a company has the following analysis of its 200 engineering graduates

Age

A Bachelors degree

B Masters degree 10 30 10 50

Total

Under 30 [C] 30-40 [D] Total

90 20 150

100 50 50 200

Over 40 [E] 40

If an engineer is selected at random from the company find, 1)The probability that he has only a Bachelors degree (0.75) 2)The probability that he has masters degree given that he is over 40 (0.2) 3)The probability that he is under 30 given that he has only a bachelors degree (0.6)

19.In a locality out of 5000 people residing 1200 are above 30 years of age and 3000 are females.Out of 1200 who are above 30, 200 are females. Suppose after a person is chosen you are told that the person is female. What is the probability that she is above 30 years of age. Ans: 0.066

20 .The probability that a trainee will remain with thee is a trainee who remained with the company or

who earn more than Rs1 lakh is 0.7. What is the probability that an employee earns more than 1 lakh/annum given that he is a trainee who stayed with the company? Ans: 0.667

Bayes Theorem: Determining the probability of an event given certain sample information, Bayes theorem is applied

Probability before revision by Bayes rule is called prior probability, because they are determined before the sample information is taken into account. A probability which has undergone revision in the light of sample information through Bayes rule is called posterior probability since it represents a probability calculated after the information is taken into account. Posterior probability is also called the revised probability because they are obtained by revising the prior probability in the light of the additional information gained. Posterior probability is always conditional probability. The conditional event being the sample information. Thus a prior probability which is an unconditional probability becomes a posterior probability which is a conditional probability by Bayes rule. The revision of the old probability in the light of the additional information supplied by the experiment and or past records is of extreme help to business managers in arriving at a valid decision in the phase of uncertainity. State Bayes Theorem: Let B1, B2, B3 .Bn are mutually exclusive and collectively exhaustive events with prior probability P(B1 ), P(B2 ),P(B3 )..P(Bn ). Let A is another event such that P(A) 0 and the conditional probability P (A/B1 ), P(A/B2 )..P(A/Bn ) are known then

PROBLEMS - BAYES

THEOREM

1. A restaurant is experiencing dissatisfaction among its customers. It analysis that there are 3 factors responsible, 1. Food quality 2. Service quality 3. Interior decoration. By conducting an analysis it assesses the probability of dissatisfaction with three factors are 0.4, 0.35 and 0.25 respectively. By conducting a survey among customers ,it also evaluates the probability of a customer going away with dissatisfaction on account of these factors are 0.6, 0.5,0.2 respectively. With this information, the restaurant wants to know that if a customer is dissatisfied what are the probabilities that it is so due to food, service ,interior decoration?

2. The respective daily productions of the 3 machines are machine A 3000 units, B 2500 units, C 4500 units. Past experience shows that 1 percent of the output produced by machine A is defective. The defective percentage in the other 2 machines are 1.2% and 2%. An item is drawn and is found to be defective what is the

probability that it is produced from (1) Machine A (2) Machine C 3. In a bolt factory, machine A,B,C manufacturers 25%, 35% and 40% of the total output and 5%, 4% and 2% are defective bolts. A bolt is drawn at random What is the prob that it was manufactured by machine A,B,C 4. In an office there are 3 clerks processing the incoming application forms ,40% of the forms processed by the first clerk has an error rate of 4%, the 2nd clerk processes 35% 0f the forms and has an error rate of 6%.The 3rd clerk processes the rest with an error rate of 3%. A form chosen randomly from the days output is found to have an error. Find the chance it was processed by the 1st, 2nd and 3rd clerk.