Page 182 - BA2 Integrated Workbook - Student 2017

Chapter 12

1.2 Notation

The probability of event ‘A’ occurring is written as P(A).

This allows us to write down some of the above rules more concisely, for example:

P(NOT A) = 1 – P(A), where P(NOT A) means the probability of event A not
occurring.

This is known as the "complementary rule".

1.3 Simple probabilities

In situations where it is possible to compile a complete list of all the equally likely
outcomes, we can define the probability of an event, denoted P(event):.

Total number of outcomes which constitute the event
P(event) = —————————————————————
Total number of possible outcomes

1.4 Types of probabilities

There are different types of probabilities. Probabilities can be:

 Exact. These can be applied to the population of outcomes, e.g. the probability
of a certain card being drawn from a pack of cards

 Empirical. These can be calculated from samples of observations from the
past, e.g. the probability of a certain level of sales occurring in a day

 Subjective. These are based on judgement, e.g. the probability of winning a
new order, or finding oil in a new drilling area

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