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Basic Probability Concepts for CAT Preparation

Saturday, October 7th, 2017

What are the chances that it will rain today? Which team has odds in favor in today’s cricket match? What is the probability that Sensex will close above 30K today? All these
questions pointed towards the chance, the likelihood of happening the uncertain event. And to determine this chance there’s a technique, a special mathematical and statistical
subject entirely related to this known as Probability. Probability is nothing else but a chance that some event might occur. More formally, it calculates a numerical value between 0
and 1 that represents the likelihood that an event might occur. It is denoted by P(E) where P is the probability of event E happening. It’s undeniable that probability is a very useful and
significant mathematical and statistical tool. The use of this technique is omnipresent. It is required in every field whether science, economics, finance etc. Since, this concept is so
essential and significant and as future business managers, we need to understand it and learn it’s application. For the same reason, it has been included in Quantitative Aptitude
section of CAT paper. It is an interesting and very simple topic though questions on this topic can at times might be mindboggling and puzzling. But, a thorough understanding can turn
the tables and make such questions a child’s play. Today, in this blog, let’s learn some of the useful techniques and methods of probability that will assist you in solving questions
during the exam.

To understand probability in its basic form son that solid foundation can be built, in this blog I will explain you using experiments in the simplified form. Before directly moving on to
explaining the concept of probability and its varied forms let’s first understand some basic terminology frequently used in its concepts.

Experiment: An operation which can produce some well-defined outcomes, is an experiment.

Random Experiment: If each trial of an experiment is conducted under identical conditions, the outcome is not unique, but may be of any possible outcome then such experiment is
known as random experiment.

Sample Space: The set of all possible outcomes in Random Experiment is known as Sample space, provided no two or more of these outcomes can occur simultaneously and
exactly one of these outcomes must occur whenever the experiment is conducted.

Event: Any subset of a sample space is called an event.

Certain and Impossible events: If S is a sample space, the both S and null set φ both are events. S is called certain event and φ is called an impossible event.

Equally Likely Events: The given events are said to be equally likely, if none of them is expected to occur in preference of the other.

Exhaustive events: In probability theory, s system of events is called exhaustive, if at least one of the event of the system occurs. Ex. If a coin is tossed then Head and Tails forms
exhaustive set of events.

Mutually Exclusive events: A set of events is called mutually exclusive events if occurrence of one of the them precludes the occurrence of any of the remaining events. In other
words, if there are two events A and B then they are called mutually exclusive if A B = φ.

Independent events:

Algebra of Events: Let A and B are two events. Then,

1. The event ‘either A or B’ is said to occur if at least one of A and B occurs. It is usually denoted as A B (A or B).
2. The event ‘both A and B’ is said to occur if both A as well B occur simultaneously. It is represented as A B (A and B).
3. The event ‘A not’ occurs if A does not occur. It is written as Aᶜ.
4. The event ‘A but not B’ is said to occur if A occurs but B does not occur. It is denoted by A-B.

Now as we have understood these some basic terms of probability we can smoothly move forward our area of interest, Probability.

Probability of an event: It basically means in performance of a random experiment the occurrence of any event is always uncertain but a measure of its probable occurrence can be
devised known as probability of the event.

1. Probability of the null event is 0.

2. Probability of a sure event is 1.
 3. 0 ≤ P(E)≤1
4. ∑P(E)= 1

Let S denotes the sample space of a random experiment and A be an event. Then the probability of A is defined as

No. of favorable outcomes for event A

Total no. of outcomes.

=n(A)/ n(S).

For ex. If an unbiased die is rolled once then what is the probability of getting 3?

The sample space of the above random experiment S is {1, 2, 3, 4, 5, 6} = 6 outcomes.

Therefore, the chance of getting 3 when die is rolled is = 1 / 6.

We can now head forward to acquaint some different forms and special types of probability. Given below are some important theorems that might help us in formulating solutions to
the problems.

If A is a subset of B then, P(A)≤P(B).

P(φ) = 0.
P(S) = 1.
P(Aᶜ) = 1 – P(A).
P(B-A) = P[B-(A B)] = P(B)-P(A B).
P(A B) = P(A) + P(B) – P(A B).
P(A B) = P(A) + P(B) when P(A B) = φ.
P(A B C) = P(A) + P(B) + P(C) – P(A B) – P(B C) – P(C A) + P(A B C).

Conditional Probability: Let S be the sample space. Let A and B be any two events. A ≠ φ. Then, probability of the event B, if A have already been occurred, is called conditional
probability of B restricted to the occurrence of A. It is represented as P(A/B). Thus, the probability of the event B restricted to the occurrence of the event A is the same as the
probability of event A B while A is considered as sample space.

P(B/A) = n(A B)/ n(A) = P(A B)/P(A)

1. P(A B) = P(A). P(B/A)

If A ≠ φ & B ≠ φ then,

2. P(A B) = P(A). P(B/A) = P(A). P(A/B).

Conditional probability is a very important concept of probability. It is used in a variety of questions. Let’s ingrain the concept more comprehensively using the example given below.

A card is drawn from the well-shuffled pack of card. What is the probability that the card drawn is of heart given that it is a king?

Let A = card is of heart and B = card is king

Therefore, P(A) = 13/52; P(B) = 4/52

Now P(A B) = 1/52

Thus, P(A/B) = P (King of heart) = P(A B)/P(A)

= (1/52)/ (4/52)

=¼

The above example was a very basic one. Questions in exam will be more difficult than this. There could be multiple concepts in one question and conditional probability can be one
of them. This concept will also be required in Bayes’ theorem. Thus, it should be understood properly.

Independent Events: Two events are said to be independent if the probable occurrence or non-occurrence of any one is not affected by occurrence or non-occurrence of the other
i.e. two events A and B are independent if

P(A/B) = P(A/Bᶜ) = P(A)

Or, P(B/A) = P(B/Aᶜ) = P(B)

Or, P(A B) = P(A). P(B)

Consider this example, A problem is given to three students whose chances of solving it are ½, ⅓, and ¼ respectively. What is the probability that the problem will be
solved?

To solve this question first,

Let there be three events A, B, and C where

A is the event when student with probability ½ solves the question,

where B is the event when student with probability ⅓ solves the question,

where C is the event when student with probability ¼ solves the question,

Therefore, P(A) = ½, P(B) = ⅓, and P(C) = ¼

Now let Aᶜ, Bᶜ and Cᶜ is the event of not solving question by the students respectively.

P(Aᶜ) = 1-½ = ½, P(Bᶜ) = 1-⅓ = ⅔, P(Cᶜ) = 1-¼ = ¾

Since we need to find the probability of solving question and determining the probability of not solving question is simpler than that and later we can subtract it from 1 to get the
probability of our interest.

Also, clearly in this question probabilities are independent of each other as probability of solving by student 1 does not affect the probability of student 2 or 3 directly or indirectly.

Therefore, P(Aᶜ Bᶜ Cᶜ) = P(Aᶜ). P(Bᶜ). P(Cᶜ) = ½.⅔.¾ = ¼

Hence, the P [problem will be solved] = 1 – P [none solves the problem]

=1–¼=¾

Note: Three events A, B, and C are independent if P(A B C) = P(A). P(B). P(C)

Three events A, B, and C are pairwise independent if P(A B) = P(A). P(B), P(B C) = P(B). P(C) & P(A C) = P(A). P(C)

Relation between Independent and Mutually Exclusiveness of two events.

If two events A ≠ φ and B ≠ φ are independent, then they are not mutually exclusive.
If two events A ≠ φ and B ≠ φ are mutually exclusive, then they are not independent.

Independent Experiments: Let there be two random experiments one after the other. If on repeated performances the sample space of any is not affected by the result of the other,
then two experiments are independent of each other.

There’s a difference between independent events and independent experiments, but students tend to confuse between the two. Clearly, former talks about events in an experiment
and latter explain independency among multiple experiments.

i.e. (i) consider the tossing of a coin twice, clearly the sample the sample space for the second is not affected by the results of the first toss. So, two tosses are random experiments.

Bayes’ Theorem: Suppose A₁, A₂, … An, are mutually exclusive and exhaustive set of events. Thus, they divide the sample into n parts and the event B occurs. Then the conditional
probability that Ai happen given that B has happened is given by

P(A/B) = P(Ai). P(B/Ai)

∑ni=1 P(Ai). P(B/Ai)

Again, to understand the application of above theorem more precisely, consider this example,

In certain day care class, 30% of children have grey color eyes, 50% have blue color eyes and 20% have other color eyes. One day they play a game together. In the first
run 65% of grey color ones, 82% of blue color ones and 50% of children of other eye color was selected. Now if a child is selected is randomly from the class and we
know that he/she was not in the first game, what is the probability that the child has blue color eyes.

As given in the theory, Let A1, A2 and A3 be the events that the student has eyes color grey, blue, and other respectively.

Therefore, P(A1) = 0.3, P(A2) = 0.5, P(A3) = 0.2

Now it’s been in question that students are randomly selected to play the game. Let E be the event of selecting a student for game 1.

Therefore. E’ be the event of selecting student in game 2.

Thus, P(E’/A1) = 1 – 0.65 = 0.35; P(E’/A2) = 1 – 0.82 = 0.18; P(E’/A3) = 1 – 0.5 = 0.5

We have to find theExtended! Use

probability that thecode DIWALI
selected child into gettwo
game 10%hasto 25%
blue offi.e.on
eyes all/E’courses.
P(A2 ) Valid for 12:42:53 more hours. REGISTER NOW ×
Using Bayes’, we get,

P(A2/E’) = (0.5*0.18) / 0.3*0.35 + 0.5*0.18 + 0.2*0.5 = 0.305

There’s one more important concept of statistics which is frequently used to simplify the calculation and it gives a straightforward solution. It is a probability distribution known as
Binomial Distribution.

Binomial Distribution for successive Events: Suppose p and q are the respective chances of the happening and failing of an event at a single trial. Then the chance of its
happening r times in trials is nCrprqn – r because the chance of its happening r times and falling n – r times in given order is prqn –r and there are nCr such orders which are mutually
exclusive and for any such order the probability is prqn –r. Therefore, the required probability is nCrprqn – r. Now let’s attain its application using the following example.

A fair dice is tossed repeatedly until six shoes up three times. The probability that exactly 5 tosses are needed will be?

Now the probability of getting ‘six’ on the dice in one trial is ⅟6. Therefore ‘p’ here is ⅟6 and thus, q will be 5/6. We need six three times in exactly 5 trials. So, let’s fix that in 5th 6 shows
up and its probability will be ⅟6. Hence the probability of getting six two times out of the 4 trials using the above distribution will be = 4C2 *(5/6)2 * (⅟6)2.

Therefore, the probability of getting three ‘six’ in exactly 5 tosses is [ 4C2 *(5/6)2 * (⅟6)2] * ⅟6 = 25/1296.

The above problem was just one example of the use of Binomial Distribution. Its application is wide and generally used in many types of problems. There are many other distributions
too but those are not relevant in the purpose of CAT (https://www.handakafunda.com/blog/cat/). But, in exam questions based on conditional probability, Bayes’ or amalgamation of all
the above. Dice and coin toss problems with complications can be asked in the exam so you should have the thorough practice of these.

You can also see Cube Based Puzzles in Logical Reasoning for CAT Exam Preparation (https://www.handakafunda.com/cube-based-puzzles-in-logical-reasoning-for-cat-exam-
preparation/)

This article was contributed by Sejal Khurana. If you want to write for us, please email us on handakafunda@gmail.com (mailto:handakafunda@gmail.com)
Online Coaching for CAT 2017 (https://www.handakafunda.com/online-cat-coaching/)

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