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# What is Probability?

## TOPIC 4  Probability (kebarangkalian) is an essential component

of inferential statistics.

##  It quantifies the degree of uncertainty (darjah ketidak-

pastian) or the relative likelihood (kebolehjadian relatif)
an event will occur.

making.

## Basic Terms in Probability Example 1:

 Experiment (uji kaji): An action or process that leads to An accounting firm has advertised the availability of its
one of several possible outcomes (kesudahan). report describing recent changes to the federal income tax
act. The following contingency table lists the probabilities of
 Sample space (ruang sampel): A list of all possible medium by which the existing accounting firm clients
outcomes of the experiment. became aware of the report and their primary interest.

##  Event (peristiwa): collection of one or more of the

possible outcomes of an experiment. It is a subset of the Medium
Primary interest
Personal tax 0.17 0.10 0.03
 The probability of any outcome or event expresses the Corporate tax 0.13 0.26 0.07
chance that the outcome or event will occur. It must lie
between 0 and 1. Goods and Services Tax 0.05 0.09 0.10

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One client is selected at random, and five events are defined as Simple and Complementary Events
follows:
 Simple event (peristiwa mudah): An event that can
C: The client is primarily interested in corporate tax.
be described by a single characteristic.
G: The client is primarily interested in goods and
The probability of an simple event will occur is known
services tax.
as marginal probability (kebarangkalian sut).
R: The client became aware of the report through radio.
 Complement event (peristiwa pelengkap): The
complement of event A is the event that occurs when
W: The client became aware of the report through
event A does not occur.
company website.
The complement of event A is denoted by A’
F: The client became aware of the report through
Complement Rule : P (A) = 1 – P (A)

## Unions and Intersections of Events Addition Rule (Peraturan Penambahan)

 Intersections (persilangan) of events  The addition rule enables us to calculate the probability
of the union of two events.
The intersection of events A and B is the event that
occurs when both A and B occur.  Addition Rule :

## It is denoted as A and B. The probability of the P (A or B) = P (A) + P (B) – P (A and B)

intersection is called the joint probability
(kebarangkalian tercantum).  Mutually exclusive events (peristiwa saling eksklusif)

 Unions (kesatuan) of events The occurrence of one event means that none of the
others can occur at the same time, i.e. P (A and B) = 0
The union of events A and B is the event that occurs
when either A or B or both occur. P (A or B) = P (A) + P (B)
It is denoted as A or B. if A & B are mutually exclusive events

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Refer to Example 1 d) became aware of the report through the Facebook or
company website
Find the probability that the client
Since F & W are mutually exclusive events,
a) aware of the report through Facebook
P (F or W) = P (F) + P (W) = 0.20 + 0.45 = 0.65
P (F) = 0.20 --- marginal probability
e) is primarily interested in goods and services tax, or
b) is not primarily interested in goods and services tax became aware of the report through the radio or both
P (G) = 1 – P (G) = 1 – 0.24 = 0.76 Since G & R are not mutually exclusive events,

## c) is primarily interested in corporate tax and became P (G or R) = P (G) + P (R) – P (G and R)

aware of the report through the company website
= 0.24 + 0.35 – 0.05 = 0.54
P (C and W) = 0.26 --- joint probability

## Conditional Probability Multiplication Rule

(Peraturan Pendaraban)
 Conditional probability (kebarangkalian bersyarat)
measures the likelihood of an event will occur, given  The multiplication rule is used to calculate the joint
that another event has occurred. probability of two events. It is based on the formula
for conditional probability.
Conditional probability of event A, given that event B
has occurred is
 Multiplication Rule :
( )
𝑃 𝐴|𝐵 = P (A and B) = P (A | B)  P (B)
( )

## Conditional probability of event B, given that event A Likewise, P (A and B) = P (B | A)  P (A)

has occurred is
( )
𝑃 𝐵|𝐴 =
( )

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Independent Events Refer to Example 1
 Objective of calculating conditional probability is to f) The probability that the client became aware of the
determine whether two events are independent. report through the radio, given that he or she is
primarily interested in corporate tax
 Independent events (peristiwa tidak bersandar)
( ) .
𝑃 𝑅𝐶 = = = 0.2826
The occurrence of one event has no effect on the ( ) .
probability of the occurrence of any other event.
g) The probability that the client is primarily interested in
 Two events A and B are said to be independent if goods and services tax, given that he or she became
aware of the report through the Facebook
P (A | B) = P (A) or P (B | A) = P (B)
( ) .
𝑃 𝐺𝐹 = = = 0.5
 The Multiplication Rule for independent events ( ) .

## h) Are R and C independent events?

Probability Trees
If R & C are independent events, we must have either
 The Multiplication Rule can be illustrated using a
P (R | C) = P (R) or P (C | R) = P (C)
probability tree (pokok kebarangkalian). It is useful
in visualizing events that occur in sequence.
From the contingency table,

## P (R | C) = 0.2826 ; P (R) = 0.35  The events in an experiment are represented by lines.

The resulting figure resembles a tree, hence the name.
P (R | C)  P (R), R and C are not independent events.
 At the ends of the “branches”, we calculate joint
probabilities as the product of the individual
Since R and C are not independent events, the joint
probabilities on the preceding branches.
probability of R and C, P (R and C) CANNOT be calculated
using the Multiplication Rule for independent events.
Therefore, P (R and C)  P (R) x P (C)

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Example 2: Probability Tree for Example 2
(Dependent Events)
A standard certification test was given at three locations. 1,000
candidates took the test at location A, 600 candidates at location Marginal
B, and 400 candidates at location C. The percentages of probability a) P (B) = 0.30
candidates from locations A, B, and C who passed the test were
70%, 68%, and 77%, respectively. One candidate is selected at b) P (P | A) = 0.70
random from among those who took the test.
c) P (C and P )
a) What is the probability that the selected candidate took
the test at location B? = P (C) x P (P | C)
= 0.20 x 0.23
b) What is the probability that the selected candidate
= 0.046
passed the test if he or she took the test at location A?

## c) What is the probability that the selected candidate took Conditional

the test at location C and failed? probability

## Bayes’ Law (Hukum Bayes) Refer to Example 2

 Bayes’ Law is a method of transforming the prior d) If the selected candidate passed the test, what is the
probability of an event into a posterior probability probability that the candidate took the test at
given that additional information is obtained. location A, B, and C respectively?

 Prior probability (kebarangkalian prior) P (A) = 0.5 , P (B) = 0.3 , and P (C) = 0.2
The initial prob. based on the present level of info.
are called prior probabilities because they are
determined prior to the results of the test
 Posterior probability (kebarangkalian posterior)

## A revised prob. based on additional information P (P | A) = 0.70 , P (P | B) = 0.68 , P (P | C) = 0.77

 Bayes’ Law is an extension of the concept of are the given conditional probabilities
conditional probability

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Therefore, the conditional probability P (A |P) and similar The revised probability that the candidate took the test at
conditional probabilities, P (B |P) and P (C |P) are called different location when the probability of passed the test,
posterior probabilities or revised probabilities because the P (P) is obtained can be calculated as follow
prior probabilities are revised after obtaining the results of
the test.