Probability is the relative frequency with which an event occurs. Probability he

Question

Probability is the relative frequency with which an event occurs. Probability helps managers make rational decisions in situations involving uncertainty. There are 3 types of probability Empirical Probability is determined by observation. For example, the number of defects in 10,000 widgets was observed to be 25. So, P(defective)- 25/10,000. Subjective Probability- Subjective probability measures the likelihood of an event subjectively. Rationally derived from experience of the past, knowledge, and conditions of the o present. o A "personal belief ", allowing substantial variation in measures. o Example: Based on past experience, I feel that the probability of candidateA winning the election is about 60%. Classical Probability requires enumerating all possible outcomes, counting the outcomes of interest, and computing probability of the outcome(s) of interest number of the outcome(s) of interest / the total number of outcomes o Example: If there are 40 even numbers and 60 odd numbers randomly distributed randomly in a box, the probability of drawing an even number, Pleven) 40/(40+60) The Probability Rules: Probability of an outcome can take any value from 0 or 0% (impossible) to 1 or 100% (certainty) The probability of all outcomes is 100%. . An event consists of 1 or more outcomes . The probability of an event not occurring is 1 minus the probability that it occurs Which of these 6 possible answers are the Valid probabilities? 1.01, 110%, 0%,-0.25%, 1,50/49, or 49/so

Explanation / Answer

Any probability value has to lie between 0 and 1 ie 0% and 100 %

In the above 6 values given only the values 0 % and 49/50 meet the condition hence out of the 6 values given only 2 values meet the condition

Also probability can never be negative and above 100 %

Hence all the other values except 0% and 49/50 are not probabilities

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