Chapter 4

Introduction to Basic Probability

LEARNING OBJECTIVES

The main objective of Chapter 4 is to help you understand the basic

principles of probability, thereby enabling you to:

1.

Describe what probability is and when one would use it

2.

Differentiate among three methods of assigning probabilities: the classical

method, relative frequency of occurrence, and subjective probability

3.

Deconstruct the elements of probability by defining experiments, sample

spaces, and events, classifying events as mutually exclusive, collectively
exhaustive, complementary, or independent, and counting possibilities

4.

Compare marginal, union, joint, and conditional probabilities by defining

each one.

5.

Calculate probabilities using the general law of addition, along with a

joint probability table, the complement of a union, or the special law of
addition if necessary

6.

Calculate joint probabilities of both independent and dependent events

using the general and special laws of multiplication

7.

Calculate conditional probabilities with various forms of the law of

conditional probability, and use them to determine if two events are
independent.

8.

Calculate conditional probabilities using Bayes rule