BUSS1020 Lecture Notes - Lecture 4: Conditional Probability, Marginal Distribution, Sample Space

• School: University of Sydney
• Department: Business Studies
• Course: BUSS1020
• Professor: All

Document Summary

Probability chance that an uncertain event will occur (b/w 0 & 1) Impossible event no chance of occurring (probability = 0) Certain event sure to occur (probability = 1) Priori based on prior knowledge of the process. No. of ways the event can occur / total no. of outcomes. E. g. probability of the day in jan if randomly selecting a day from the year 2013. No. of ways the events has occurred / no. of trials. E. g. probability of an increase in an i(cid:374)di(cid:448)idual(cid:859)s fi(cid:374)a(cid:374)(cid:272)ial asset(cid:859)s pri(cid:272)e. P = no. of days price increased / total no. of days considered. E. g. probability of selecting a male taking statistics from a table no. of males taking stats / total no. of people. Subjective probability (cid:271)ased o(cid:374) a (cid:272)o(cid:373)(cid:271)i(cid:374)atio(cid:374) of a(cid:374) i(cid:374)di(cid:448)idual(cid:859)s past experience, personal opinion, analysis of a particular situation. Has(cid:374)(cid:859)t o(cid:272)(cid:272)urred / (cid:374)ot e(cid:374)ough prior k(cid:374)o(cid:449)ledge. A lot of experts use this probability. Simple event described by a single characteristic.