Probability

Chapter 4- Probability Question and Answer 2023. Probability Key Concept Correct Answer: Learning how to interpret probability values. Event Correct Answer: any collection of results or outcomes of a procedure Simple Event Correct Answer: an outcome or an event that cannot be further broken down into simpler components Sample Space Correct Answer: a procedure consists of all possible simple events; that is, the _____ _____ consists of all outcomes that cannot be broken down any further Notation: P Correct Answer: denotes a probability Notation: A, B, C Correct Answer: denote specific events Notation: P(A) Correct Answer: denotes the probability of even A occurring Rule 1: Relative Frequency approximation of Probability Correct Answer: Conduct (or observe) a procedure, and count the number of times event E actually occurs. Based on these actual results, P(E) is approximated as follows: no. of times event occurred divided by no. of times procedure was repeated. Rule 2: Classical Approach to Probability (Requires Equally Likely Outcomes) Correct Answer: Assume that a given procedure has n different simple events and that each of those simple events has an equal chance of occurring. If event A can occur in s of these n ways, then then: P(A)= s/n Rule 3: Subjective Probabilities Correct Answer: P(A), the probability of event A, is estimated by using knowledge of relevant circumstances. Law of Large Numbers Correct Answer: As a procedure is repeated again and again, the relative frequency probability of an event tends to approach the actual probability Simulation Correct Answer: is a process that behaves in the same ways as the procedure so that similar results are produced. Probability Limits Correct Answer: Always express probability as a fraction or decimal number between 0 and 1. Probability of an impossible event is Correct Answer: Zero Probability of an event that is certain to occur is Correct Answer: 1 0 = P(A)= 1 Correct Answer: For any event (A), the probability of (A) is between 0 and 1 inclusive. Complementary Events Correct Answer: the complement of event A is denoted by A bar, and consists of all outcomes in which even A does NOT occur. Probability of an unlikely event Correct Answer: a probability that is very small such as 0.05 or less Actual odds against Correct Answer: Usually expressed in the form a:b Actual odds in favor Correct Answer: The reciprocal of the odds against event. b:a Payoff odds Correct Answer: Payoff odds against event A= (net profit): (amount bet)