Probability for Business Statistics

Question 1

Subjective probability

Answer 1

a prediction that is based on an individual’s personal judgment, not on mathematical calculations.

Question 2

Probability

Answer 2

the likelihood of a certain event occurring out of a total possible number of events
Educated guess

Question 3

relative frequency

Answer 3

the ratio of the occurrence of a singular event and the total number of outcomes

Question 4

Theoretical probability

Answer 4

the ratio of the desired outcome and the total number of possible outcomes

Question 5

Actual probability

Answer 5

the ratio of successful outcomes and the total number of trials

Question 6

calculating of possible outcomes

Answer 6

a process for determining the number of possible results for an event

Question 7

fundamental counting principle

Answer 7

This principle states that if there are p possibilities for one event and q possibilities for a second event, then the number of possibilities for both events is p x q.

Question 8

permutation

Answer 8

an arrangement, or ordering, of a set of objects

Question 9

Addition Rule of Probability

Answer 9

which is a rule for finding the union of two events, either mutually exclusive or non-mutually exclusive.

Question 10

mutually exclusive event

Answer 10

which are events that cannot happen at the same time.
Find the total of possible outcomes
Find the desired outcomes
Create a ratio for each event
Add the ratios, or fractions, of each event
P(A or B) = P(A) + P(B)

Question 11

non-mutually exclusive events

Answer 11

which are events that can happen separately or at the same time.
Find the total of possible outcomes
Find the desired outcomes
Create a ratio for each event
Add the ratios, or fractions, of each event
P(A or B) = P(A) + P(B) - P(A and B)

Question 12

Multiplication Rule of Probability

Answer 12

to find the probability of the intersection of two events, multiply the two probabilities.

Question 13

Independent events

Answer 13

when the probability of an event is not affected by a previous event

Question 14

dependent event

Answer 14

when one event influences the outcome of another event in a probability scenario

Question 15

Contingency tables

Answer 15

tools used by statisticians when they need to make sense of data that has more than one variable
also called cross tabulation tables or cross tab
The numbers displayed give the frequency of each data point.

Question 16

contingent

Answer 16

dependent

Question 17

set

Answer 17

a collection of elements

Question 18

element

Answer 18

a collection of anything - numbers, letters, words, objects

Question 19

subset

Answer 19

a special, funny set

every element in the subset can be found in the other set

Question 20

Union

Answer 20

when two or more sets are united, or added together.

U

Question 21

Intersection

Answer 21

when two or more sets intersect, or are common objects, in sets
set of elements that are found in both sets

Question 22

Complement

Answer 22

when a set is subtracted or not included in the set.

Question 23

Venn diagram

Answer 23

can show us the sets and operations nicely in picture form

Question 24

disjoint set

Answer 24

It is disjoint, or has no elements that are the same in any other set, but it is still in our universal set.

Question 25

element of a set

Answer 25

an object that can be found in that set

E

Question 26

Bayes’ theorem

Answer 26

the probability of A happening if B happens is equal to the probability of A happening times the chance of B happening if A is true, divided by the probability of just B happening