Page 77 - DMTH404_STATISTICS

Sachin Kaushal, Lovely Professional University Unit 6: Probability

Unit 6: Probability Notes

CONTENTS

Objectives
Introduction
6.1 Classical Definition
6.2 Counting Techniques

6.2.1 Fundamental Principle of Counting
6.2.2 Permutation
6.2.3 Combination
6.2.4 Ordered Partitions

6.3 Statistical or Empirical definition of Probability
6.3.1 Definition (R. Von Mises)
6.7 Summary of Formulae
6.8 Keywords

6.9 Self Assessment
6.10 Review Questions
6.11 Further Readings

Objectives

After studying this unit, you will be able to:
 Define Classical Probability
 Discuss Counting Techniques

 Discuss Statistical or Empirical definition of Probability
Introduction

The concept of probability originated from the analysis of the games of chance in the 17th
century. Now the subject has been developed to the extent that it is very difficult to imagine a
discipline, be it from social or natural sciences, that can do without it. The theory of probability
is a study of Statistical or Random Experiments. It is the backbone of Statistical Inference and
Decision Theory that are essential tools of the analysis of most of the modern business and
economic problems.

Often, in our day-to-day life, we hear sentences like 'it may rain today', 'Mr X has fifty-fifty
chances of passing the examination', 'India may win the forthcoming cricket match against Sri
lanka', 'the chances of making profits by investing in shares of company A are very bright', etc.
Each of the above sentences involves an element of uncertainty.

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