Unit 4: Foundations of Probability

Table of Contents

4.1 Basic Terminology

Random Experiment

An experiment or process whose outcome cannot be predicted with certainty, but all possible outcomes are known.

Sample Point

A single possible outcome of a random experiment.

Sample Space (S)

The set of all possible outcomes (all sample points) of a random experiment.

4.2 Events and Algebra of Events

Event

An event is any subset of the sample space S. It is a collection of one or more sample points.

Types of Events

Algebra of Events (Set Operations)

Since events are sets, we can use set theory to combine them.

[Image of Venn diagrams illustrating A union B, A intersection B, and A complement]
Operation Notation Meaning ("In Words") Example (A={1,2}, B={2,3})
Union A ∪ B "Event A OR B or Both" {1, 2, 3}
Intersection A ∩ B "Event A AND B" {2}
Complement A' or Aᶜ or A-bar "Event NOT A" If S={1,2,3,4}, A' = {3, 4}

Mutually Exclusive (or Disjoint) Events

Two events A and B are mutually exclusive if they cannot occur at the same time. This means their intersection is the impossible event (Ø).

A ∩ B = Ø

Exhaustive Events

A set of events {A₁, A₂, ...} is exhaustive if their union is the entire sample space. At least one of the events must occur.

A₁ ∪ A₂ ∪ ... = S

4.3 Definitions of Probability

4.4 Classical (or 'a priori') Definition

This definition applies when all outcomes in the sample space are equally likely (e.g., fair coin, fair die).

If a sample space S has 'N' finite, mutually exclusive, and equally likely outcomes, and an event 'A' has 'm' of those outcomes favorable to it, then the probability of A is:
P(A) = m / N
P(A) = (Number of outcomes favorable to A) / (Total number of possible outcomes)

Merits and Demerits

4.5 Relative Frequency (or Statistical / 'a posteriori') Definition

This definition is based on observation and experimentation.

If a random experiment is repeated 'n' times under identical conditions, and the event 'A' occurs 'm' times, then the probability of A is the limit of the relative frequency (m/n) as the number of trials 'n' becomes infinitely large.
P(A) = limn→∞ (m / n)

Merits and Demerits

4.6 Axiomatic Definition (Kolmogorov's Axioms)

This is the modern, mathematical definition of probability. It doesn't say how to calculate probability; it just states the three rules (axioms) that a probability measure 'P' must follow.

Given a sample space S and a set of events, a probability P(A) is a function that assigns a real number to every event A, such that:

The Three Axioms of Probability

  1. Axiom 1: Non-negativity
    P(A) ≥ 0

    The probability of any event is a non-negative number.

  2. Axiom 2: Certainty (Normalization)
    P(S) = 1

    The probability of the entire sample space (a certain event) is 1.

  3. Axiom 3: Additivity

    If A and B are mutually exclusive events (A ∩ B = Ø), then:

    P(A ∪ B) = P(A) + P(B)

    (This extends to any countable number of mutually exclusive events).

Merits and Demerits