Page 217 - BA2 Integrated Workbook STUDENT 2018

Risk 2: Probability

Probability

1.1 What is probability?

Most people have an intuitive, common-sense understanding of probabilities.

For example:

"If I flick a coin, then there is a 50:50 chance of getting heads or tails."

"You are more likely to be hit by lightning, than win the lottery"

These statements relate to the idea of probability.

A probability expresses the likelihood of an event occurring.

Note the terminology here. The 'event' referred to is simply what we want to calculate
the probability for, such as 'winning the tender' or 'rolling a six'.

 If an event is certain to occur, then it has a probability of one.

 If an event is impossible, then it has a probability of zero.

 For any event, the probability of it occurring must lie between zero and one.

 The higher the probability is, then the more likely it is that the event will happen.

 In any given scenario, the probabilities associated with all possible outcomes
must add up to one.

If a bag contains 10 balls (4 red, 4 yellow and 2 blue) and a ball is selected at
random. The probability that a red ball is selected is 4 out of 10, or 40%.

If the selected ball was red and it was placed back in the bag, the probability of then
selecting a blue ball is 2 out of 10 or 20%.

If the selected ball was red but it was not placed back in the bag, the probability of
then selecting a blue ball is 2 out of 9 or 22%.

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