BAMS1743 QUANTITATIVE METHODS

Chapter 4: Probability

TERMS USED IN PROBABILITY THEORY

 Experiment
In probability term, an experiment is defined as a process which
generates a well-defined outcome that is not predictable in advance,
but where all possible outcomes are known.

 Sample space, S
When we write down all the possible outcomes of our experiment,
we have defined the sample space of the experiment. The possible
outcomes in S are listed in curly brackets,  .

Example:
Experiment Sample space
Selecting an item off an
assembly line for inspection S = {Defective, Non-defective}
Throwing a coin S = {Head, Tail}
Tossing two coins S = {(H, H), (H, T), (T, H), (T, T)}
Demand for a new item S = {0, 1, 2, 3, 4, …, }
Rolling a dice once S = {1, 2, 3, 4, 5, 6}
Rolling a pair of dice S = {(1,1), (1,2), (1,3), (1,4), (1,5), (1,6)
(2,1), (2,2), (2,3), (2,4), (2,5), (2,6)
(3,1), (3,2), (3,3), (3,4), (3,5), (3,6)
(4,1), (4,2), (4,3), (4,4), (4,5), (4,6)
(5,1), (5,2), (5,3), (5,4), (5,5), (5,6)
(6,1), (6,2), (6,3), (6,4), (6,5), 6,6)}

 Events

An event is a set of outcomes which satisfies a given condition. It

is a subset of the sample space. The event is said to have occurred if
the outcome of the experiment (when it is performed) is contained in
the event set.

1
Example:
Experiment Possible events
(a) Rolling a die Event A = obtaining a 5 = {5}
Event B = obtaining an even number = {2, 4, 6}

(b) Tossing two Event C = getting at least 1 head = {HT, TH, HH}
coins Event D = getting exactly 1 head = {HT, TH}

(c) Demand for a Event E = demand > 8 = {9, 10, 11, …, }

new product

 Venn diagram
A Venn diagram is a simple pictorial representation of the relationships
between events.
S
Events

 Complement of an event
The complement of an event A is the event that A does not occur. It
̅ and contains all the experimental outcomes that are
is denoted by 𝑨
̅ is certain to occur when the
not contained in event A. Either A or 𝑨
experiment is carried out as both events together contain all the
outcomes in the sample space.

 Union of Events
Let A and B be two events defined in a sample space. The union of
events A and B is the collection of all outcomes that belong either to A
or B or to both A and B and is denoted by. A U B.

 Intersection of Events

Let A and B be the two events defined in a sample space. The

intersection of A and B represents the collection of all outcomes that
are common to both A and B and is denoted by A ∩ B.

2
A B A B

A B A B

̅∩𝑩
𝑨 ̅
𝑪𝒐𝒎𝒑𝒍𝒆𝒎𝒆𝒏𝒕 𝒐𝒇 𝑨 → 𝑨

Example:
Given S = {1, 2, 3, 4, 5, 6, 7, 10, 12, 15, 20}. Place these numbers in the
Venn diagram.

3
PROBABILITY, P
 Probability is a measurement of the likelihood (or chance,
possibility, proportion) of an event will occur in a given sample
space.
 Example of fact statements of probability:
(a) There is a 30% chance that this job will not be finished in time.
(b) There is no possibility of delivering the goods before Tuesday.
 Notation: P(A)  the probability that an event A will occur.

 Two properties of probability

1. The probability of an event always lies in the range 0 to 1
0 ≤ P(Ei) ≤ 1 and 0 ≤ P(A) ≤ 1
B  impossible event if and only if P(B) = 0
C  sure event if and only if P(C) = 1
2. The sum of the probabilities of all simple events (assume n simple
events) for an experiment is always 1
∑ P(𝐸𝑖 ) = P(𝐸1 ) + P(𝐸2 ) + ⋯ + P(𝐸𝑛 ) = 1

Let n(A)  total number of outcomes belong to event A

n(S)  total number of outcomes for the experiment
Then
n( A)
The probability of an event A, P( A) 
n( S )

Example:
A fair die is thrown. Let E be the event “the number is odd” and F be the
event “the number is greater than 4”.
(i) State the sample space.
(ii) Find P(E) and P(F).

Solution:
(i) Sample space, S = {1, 2, 3, 4, 5, 6}  n(S) = 6
(ii) E = { 1, 3, 5 }  n(E) = 3 F={ }  n(F) =
n(E) 3 1 n(F) 2 1
P(E)    P(F)   
n(S) 6 2 n(S) 6 3

LAWS OF PROBABILITY

A. The Complement Rule

̅ is the complementary event of A then P(A
If A ̅ ) = 1 – P(A).

4
B. The Addition Rule
Let A and B to be two events defined in a sample space S.
Probability of either event A or B or both A and B happen
= P (A U B)
For mutually exclusive For non-mutually exclusive events,
events,
P(A U B) = P(A) + P(B) P(A U B) = P(A) + P(B) – P(A ∩ B)

Events that are mutually exclusive cannot happen at the same time, i.e.
their respective event sets do not overlap.

Note: In general, if A1 , A2 , … , An are mutually exclusive events then

P(A1 U A2 U … U An) = P(A1) + P(A2) + … + P(An)

Example
Consider the following two events for an application filed by a person to
obtain a car loan:
A  event that the loan application is approved
B  event that the loan application is rejected
Are the two events mutually exclusive? Explain your answer.

Solution:
The two events A and B are mutually exclusive. Either the loan application
will be approved or it will be rejected. Since, A ∩ B =  , therefore, P(A ∩
B) = 0.

Example:
There are 25 students in a class. 5 of them scored A and 10 of them
scored B while the others scored C in Introductory Statistics. If a student

5
is selected at random, what is the probability that the selected student
scored A or B in Introductory Statistics?

Solution:
Let A  students scoring A in Introductory Statistics
Let B  students scoring B in Introductory Statistics

Example:
In a business course in a college, 90% of the students passed Statistics,
95% of the students passed IT and 88% passed both Statistics and IT. A
student is selected at random.
(a) What is the probability that the student passed Statistics or IT?
(b) What is the probability that the student passed neither Statistics nor
IT?

Solution
Let T  the students passed Statistics
M  the students passed IT

Given P(T) = 0.90, P(M) = 0.95, P(T ∩ M) = 0.88

(a) P(T U M) =

̅̅̅̅̅̅̅̅
(b) P(T ∪ M) =

Alternative Solution 1:
S
T M

0.88

Refer to the Venn diagram above,

(a) P(T U M) = 0.02 + 0.88 + 0.07 = 0.97

̅̅̅̅̅̅̅̅
(b) P(T ∪ M) = 1 – 0.02 – 0.88 – 0.07 = 0.03

6
Example:
When drawing a card randomly from a deck of playing cards, what is the
probability that
(Answer: (a) 1/13, (b) 1/13, (c) 1/4, (d) 2/13, (e) 4/13)

(a) an ace will be drawn?

(b) a king will be drawn?
(c) a heart will be drawn?
(d) an ace or a king will be drawn?
(e) an ace or a heart will be drawn?

C. Conditional Probability
When an event happens is considered with the condition that another
event happens, then the event is a conditional event. The conditional
probability of the occurrence of event B given that event A has occurred,
denoted by P(B │A) is defined by
P(A  B)
P(B│A) = if P(A) > 0
P(A)

Example:
The probabilities that a student will fail Accounting, Mathematics, or both
are P(A) = 0.20, P(M) = 0.15, and P(A∩M) = 0.03 respectively. What is
the probability that

(a) he will fail Accounting given that he has failed Mathematics?

(b) he will fail Mathematics given that he has failed Accounting?
(Answer: (a) 0.20, (b) 0.15)

Solution:

7
Note:(1) If P(A) = 0 then P(B │ A) is not defined.
(2) If A and B are independent then
P(B │A) = P(B ) and P(A │B) = P(A)

D. The Multiplication Rule

Let A and B to be two events defined in a sample space S.

For independent events, For dependent events,

P(A ∩ B) = P(A) × P(B) P(A ∩ B) = P(A)  P(B│A)

If A and B are independent, then If A and B are dependent events

the outcome of event A does not then the outcome of B depends
affect the outcome of event B and upon the outcome of A.
vice versa.
E.g. A = passing your exam.
E.g. A = passing your exam B = graduating from college.
B = throwing a coin getting A and B are dependent events
‘H’
A and B are independent

Note:
(1) In general, if A1 , A2 , … , An are independent events then P(A1 ∩
A2 ∩…∩ An ) = P(A1) × P(A2) × ⋯ × P(An)
(2) Independent events are not mutually exclusive, i.e. the two events
can occur together.
(3) Dependent events may or may not be mutually exclusive.

Example:
Students take two independent tests. 30% of the students pass test A and
60% pass test B. Find the probability that a student selected at random
will pass
a) both tests b) only test A c) only one test

(Answer: (a) 0.18 (b) 0.12 (c) 0.54)

8
Solution:
A  pass test A  P(A) = 0.3 ̅ ) = 0.7
 P(A
B  pass test B  P(B) = 0.6 ̅) = 0.4
 P(B

a) P(A ∩ B) = P(A)  P(B)

̅)
b) P(A ∩B = P(A)  P(B̅)

̅ ∩ B) = P(A)
̅) + P(A
c) P(A ∩ B  P(B̅) + P(A̅)  P(B)

Example:
A bag contains five red balls and eight yellow balls. If two balls are drawn
consecutively and without replacement, what is the probability that
(a) both are yellow?
(b) both are of different colours?
(c) both are red?
(Answer: (a)14/39, (b) 20/39, (c) 5/39)

Solution:

Example:
Suppose that a batch of ten electrical parts is known to contain eight good
parts and two defective parts. Calculate the probability that the two parts
selected will both be good given that the two parts are selected randomly
and consecutively
(a) with replacement;
(b) without replacement.

9
(Answer: (a) 16/25 (b) 28/45)

Solution:
Let event G i  i th part is good. i = 1, 2.

(a) Using multiplication rule for independent events:

P(G 1 ∩ G 2) = P(G 1) × P(G 2)
=

(b) Using multiplication rule for dependent events:

P(G 1 ∩ G 2) = P(G 1) × P(G 2│G 1)
=

Example

Given P(G) = 0.5, P(H) = 0.4 and P(G and H) = 0.1.

(a) Draw a Venn diagram and calculate
i) P(G │H) ii) P(H │G) ̅)
iii) P(H
iv) P(G or H) v) P(G or ̅H)
(b) Are the events G and H mutually exclusive? Explain.

(c) Are the events G and H independent? Explain.

Solution:
(a) S
G H

10
TREE DIAGRAM
 Is a graphical aid to help us visualize problems involving combinations
of trials. It can be used whenever the probability of each stage of the
outcomes is dependent on the previous one or not.
 A useful way for portraying conditional and joint probabilities.
 Each outcome is represented by a branch of the tree.

Example:
Draw the probability tree for the experiment of tossing a coin 3 times. Find
the sample space for this experiment.

Solution:
First toss Second toss Third toss Final outcomes

H HHH
H T
HHT

T H HTH
H T
HTT

T H THH
H T
THT
T
H TTH
T
TTT
S = { HHH, HHT, HTH, HTT, THH, THT, TTH, TTT }

Example:
A box contains 20 DVDs, 4 of which are defective. What is the probability
that both are defective if 2 DVDs are selected consecutively and randomly
from this box
(a) with replacement;
(b) without replacement?
(Answer (a) 1/25 (b) 3/95)

Solution:
(a) With replacement:

11
Let D i  i th DVD is defective. i = 1, 2
P(D1) = P(D2) = 4  P(𝐷̅1 ) = P(𝐷
̅2 ) = 16
20 20
1st selection 2nd selection Joint Probabilities

D2 P( D1 ∩ D2 ) = 4  4 = 1
20 20 25
D1
̅2
𝐷
̅2 ) = 4  16 = 4
P( D1 ∩ 𝐷
20 20 25

̅
𝐷1 D2 ̅1 ∩ D2 ) = 16  4 = 4
P(𝐷
20 20 25

̅2
𝐷
̅1 ∩ 𝐷
P(𝐷 ̅2 ) = 16  16 = 16
20 20 25
 P( D1 ∩ D2 ) =

(b) Without replacement:

P(D1) = 4  P(𝐷 ̅1 ) = 16
20 20
P(D2│D1) = 3  P(𝐷 ̅2 │D1) = 16
19 19
P(D2│𝐷̅1 ) = 4  P(𝐷 ̅2 │𝐷
̅1 ) = 15
19 19

1st selection 2nd selection Joint Probabilities

D2 P( D1 ∩ D2 ) = 4  3 = 3
20 19 95
D1 ̅2
𝐷
̅2 ) = 4  16 = 16
P( D1 ∩ 𝐷
20 19 95

̅1
𝐷 D2 ̅1 ∩ D2 ) = 16  4 = 16
P(𝐷
20 19 95
̅2
𝐷
̅1 ∩ 𝐷
P(𝐷 ̅2 ) = 16  15 = 12
20 19 19

 P( D1 ∩ D2 ) =

12
Bayes’ Theorem
Suppose that A and B are mutually exclusive events that exhaust the
sample space of an experiment associated with them, i.e. A ∩ B =  and
A U B = S. P(A) and P(B) are known.
If D is the actual outcome of an experiment where
D = (A ∩ D) U (B ∩ D).
P(DA) and P(DB) are known, then Bayes’ theorem enables us to
calculate
(a) P(D) = P[(A ∩ D) U (B ∩ D)]
= P (A ∩ D) + P(B ∩ D)
= P(A) × P(D│A) + P(B) × P(D │B)
which is known as the theorem of total probabilities.

(b) P(A │D) = P(A  D) = P(A)  P(D | A)

P(D) P(A)  P(D | A) + P(B)  P(D | B)
which is known as posterior probability.

Example:
In a certain college, the girls constitute 60% of the student population.
25% of the boys and 10% of the girls are studying Statistics. If a student
is selected at random, determine the probability that the student is
(a) a girl and studying Statistics,
(b) a boy and studying Statistics,
(c) studying Statistics,
(d) a girl given that the student studying Statistics.
(Answer: (a) 0.06, (b) 0.10, (c) 0.16, (d) 0.375)

Solution:
G  the student is a girl  P(G) = 0.60
B  the student is a boy  P( B ) = 0.40
T  the student is studying Statistics  P(T | B) = 0.25
 P(T | G) = 0.10
Gender Conditional Joint Probabilities
Probabilities

13
Example:
A manufacturer purchases a particular component from three suppliers:
A, B, and C. 30% of the components are purchased from A, 20% from B
and 50% from C. It is learned that 3% of the components from A, 5% from
B and 4% from C are defective. When the components arrive, they are
placed directly in a bin and not inspected or identified by supplier. Draw a
well-labelled probability tree diagram with the joint probabilities calculated
to illustrate this situation. Determine the probability that a randomly
selected component is
(a) from B and defective,
(b) defective,
(c) from B given it was defective,
(d) from B or found to be defective.
(Answer: (a) 0.01, (b) 0.039, (c) 0.2564, (d) 0.229)

Solution:
A  a component selected is purchased from A,
B  a component selected is purchased from B,
C  a component selected is purchased from C,
D  a component is defective.

14
Suppliers Conditional Probabilities Joint Probabilities
D P(A ∩ D) =0.3×0.03=0.009
P(D|A)=0.03
A ̅
𝐷
̅ ) =0.3×0.97=0.291
P(A ∩ 𝐷
̅ |A)=0.97
P(𝐷
P(A)=0.3 D P(B ∩ D) =0.2×0.05=0.010
B P(D|B)=0.05
̅
𝐷
P(B)=0.2 ̅ ) =0.2×0.95=0.190
P(B ∩ 𝐷
̅ |B)=0.95
P(𝐷
C D P(C ∩ D) =0.5×0.04=0.020
P(D|C)=0.04
P(C)=0.5
̅
𝐷 ̅ |C)=0.96 ̅ ) =0.5×0.96=0.480
P(𝐷 P(C ∩ 𝐷

CONTINGENCY TABLE
A contingency table is a table in which all possible events (or outcomes)
for one variable are listed as row headings and all possible events for a
second variable are listed as column headings. The value entered in each
cell of the table is the observed frequency of each joint occurrence.

Example:
The following contingency table describes 200 customers of an electrical
store according to age and gender.

15
Gender
Age Total
Male (M) Female (F)
Under 30 (U) 60 50 110
30 & over (O) 80 10 90
Total 140 60 200
A person is selected randomly from the 200 customers.
(a) Find
(i) P(M), P(F), P(U) and P(O),
(ii) P(M ∩ U), P(F ∩ O), P(M U U), P(F U O),
(iii) P(U│M), P(M│U), P(O│F), P(F│O).
(b) Are the events “Age under 30 (U)” and “Male customer (M)”
mutually exclusive? Explain.
(c) Are the events “Age under 30 (U)” and “Male customer (M)”
independent? Explain.
(Answer (a) (i) 7/10, 3/10, 11/20, 9/20 (ii) 3/10, 1/20, 19/20, 7/10
(iii) 3/7, 6/11, 1/6, 1/9 (b) No (c) No)

Solution:

16
Probability rules:

1. ̅ ) = 1 – P(A)
P(A

2. P(A U B) = P(A) + P(B) if A and B are mutually

exclusive

3. P(A U B) = P(A) + P(B) – P(A ∩ B) if A and B are non-

mutually exclusive
4. P(A ∩ B)
P(B|A) =
P(A)

5. P(A ∩ B) = P(A) × P(B) if A and B are

independent

6. P(A ∩ B) = P(A)  P(B│A) if A and B are

dependent
7. P(At least 1) = 1 – P(None)

17
BAMS1743 QUANTITATIVE METHODS
TUTORIAL 4 (Probability)

1. For events A and B, it is known that P(A) = P(B), P(A ∩ B) = 0.1

and P(A U B) = 0.7. Find P(A).

2. ̅ ) = 2/3, P(B) =1 2 and P(A ∩ B) = 1/12.

Given 𝑃(A
Find P(A U B).

3. If events A and B are such that they are independent and P(A) =
0.3, P(B) = 0.5, find P(A ∩ B) and P(A U B). Are events A and B
mutually exclusive?

4. X and Y are two events such that P(X) = 2 5 , P(X | Y) =1 2 and

P(Y | X) = 2 3 . Find
(a) P(X ∩ Y),
(b) P(Y) ,
(c) P(X U Y).

5. One student is selected at random from a group of 100 known to

consist of 70 full-time (40 female and 30 male) students and 30
part-time (20 female and 10 male) students. Event A is “the
student selected is full-time” and event C is “the student selected
is female”.
(a) Find the probabilities P(A), P(C) and P(A|C). Are events A
and C independent?
(b) Find the probability P(A∩C) using multiplication rule.

6. A manufacturer purchases two machines A and B. The probability

that A will last five years is 4/5 and the probability that B will last
five years is 3/4. Find the probability that
(a) both machines will last five years;
(b) only machine A will last five years;
(c) at least one machine will last five years;
(d) neither machine will last five years.

7. A student artist who has entered an oil painting and a watercolour in

a show feels that the probabilities are, respectively, 0.19, 0.13 and
0.11 that she will sell the oil painting, the watercolour, or both.
(a) Draw a Venn diagram to show the above information.
(b) What is the probability that she will sell
(i) either of these works but not both

18
(ii) neither of these works
(iii) the oil painting but not the watercolour?

8. Alice, Betty and Catherine take an economy test. The probability

1 2 3
for each of them pass the test are , and respectively.
2 3 4
(a) Draw a tree diagram. Write out the sample space.
(b) Calculate the probability that two of them fail the test.
(c) Find the probability that at least two of them pass the test.

9. Items leaving a production process are tested automatically, but it

is known that the test is not completely reliable. Experience shows
that 85% of the output is satisfactory and 15% is defective. The
probability that a satisfactory item fails the automatic test is 0.07
and the probability that a defective item fails the automatic test is
0.97.
(a) Draw a well-labelled probability tree diagram with joint
probabilities calculated to illustrate this situation.
(b) Calculate the probability that a randomly selected item
leaving the process
(i) fails the test,
(ii) is defective given that it fails the test,
(iii) is satisfactory given that it does not fail the test,
(iv) Is satisfactory or it does not fail the test.

10. HL Bank records show that 75% of its car loans are completely
repaid. Analysis on the unpaid loans shows that 85% loan
applicants would have been employed at their present job for less
than two years. Of the repaid loan, 25% loan applicants would
have been employed at their present job for less than two years.
(a) Draw a well-labelled probability tree diagram with joint
probabilities calculated for the above problem.
(b) What is the probability that a particular loan applicant would
have been employed at his or her present job for less than
two years?
(c) Given that a particular loan application has been employed
at his or her present job for only one year, what is the
probability that this person will repay the loan?

19
11. A company decides to check on the accuracy of invoicing. Invoices
are prepared by three clerks X, Y and Z. A random sample of 1000
invoices is selected. 300 were prepared by X, 300 by Y and 400
by Z. The table below shows the number of errors of the 1000
invoices for X, Y and Z respectively:
Clerks
Accuracy
X Y Z Total
Error (E) 6 15 12 33
No Error (E̅) 294 285 388 967
Total 300 300 400 1000
From the sample of 1000 invoices, one invoice was selected.
Calculate the probability that
(a) it was prepared by Z.
(b) it contained an error.
(c) It was prepared by Z and contained an error.
(d) it was prepared by Z given that it contained an error.
(e) it contained an error given that it was prepared by Z.

12. The table below shows the number of boxes of 100 tubes
containing defectives:

Number of defective tubes

Firm
0 1 2 3 or more
Supplier A 500 200 200 100
Supplier B 320 160 80 40
Supplier C 600 100 50 50

If one box had been selected randomly, what is the probability that
(a) the box would have come from Supplier A?
(b) it would have no defectives and come from Supplier A?
(c) It would have no defectives or come from Supplier A?
(d) it contained one or two defective tubes given the box came
from Supplier B?
(e) it came from Supplier C if it is known that the box has two
defective tubes?

20
13. Eighty applicants for a job were assessed as either good or poor
for their oral and written communication skills. The resulting
assessments are given in the contingency table below:

Written
Oral Good (GW) Poor (PW) Total
Good (GO) 17 21 38
Poor (PO) 12 30 42
Total 29 51 80

(a) From the table, find the probability that a randomly selected
applicant has:
(i) poor oral communication skill;
(ii) good written communication skill;
(iii) good oral and good written communication skills;
(iv) good oral or good written communication skill;
(v) good written communication skill given that the
applicant has good oral communication skill.
(b) Are the event “good oral and good written communication
skills” mutually exclusive? Explain.
(c) Are good oral and good written communication skills
independent? Explain.

Answers:

1. 0.4
2. 3/4
3. 0.15, 0.65, No
4.(a) 4/15 (b) 8/15 (c) 2/3
5.(a) 7/10, 3/5, 2/3, No (b) 2/5
6. (a) 0.6 (b) 0.2 (c) 0.95 (d) 0.05
7. (b) (i) 0.1 (ii) 0.79 (iii) 0.08
8. (a) S = {PPP, PPF, PFP, PFF, FPP, FPF, FFP, FFF}
(b) 1/4 (c) 17/24
9. (b)(i) 0.205 (ii) 0.7098 (iii) 0.9943 (iv) 0.8545
10. (b) 0.4 (c) 0.4688
11. (a) 0.4 (b) 0.033 (c) 0.012 (d) 0.3636 (e) 0.03
12. (a) 0.4167 (b) 0.2083 (c) 0.8 (d) 0.4 (e) 0.1515
13. (a) (i) 0.525 (ii) 0.3625 (iii) 0.2125 (iv) 0.625 (v) 0.4474
(b) No (c) No

21