BU127 Lecture Notes - Lecture 3: Photocopier, Fair Coin, Mutual Exclusivity
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BU127 Full Course Notes
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Outcome cannot be known with certainty in advance. May be an elementary event- roll a die . numbers 1,2 6. May be an aggregate even- roll a die numbers either odd or even. Sample space- set of all possible events for experiment usually denoted by s: ex. Roll a die s = 1 2 3 4 5 6. Pick a card s = all 52 cards of a bridge deck. Methods of assigning probability: classical method- based on rules and laws. P(10) = 3/36: relative frequency method- based on experimentation or historical data. Probability that customer who gets pre approved for a mortgage and will actually take out a mortgage is 95%. Probability that a photocopier breaks down in any given week is 30%: subjective method- based on a persons intuition or reasoning. However when dealing with economic/ business activity you should use relative frequency method. All elementary events not in the event e are in its complementary even e".
