Chapter 6
Probability Theory: Measuring the Likelihood of Events
IN THIS CHAPTER
Understanding sets and how they’re related to each other
Determining the possible outcomes of an experiment
Applying types of probabilities
Using rules of probability
Probability theory is a branch of mathematics that focuses on the analysis of random events and is the foundation of all statistical analysis. You can use probability theory to model a large number of situations that arise in practice. For example, you can use probability theory to estimate how likely it is that a new product will succeed in the marketplace, identify appropriate prices for an insurance company to charge its customers, and more.
This chapter reviews the mathematical foundations of probability theory, such as sets and events, defines types of probabilities, and introduces the rules of probability.
Working with Sets
Probability theory is based on the notion of a set — a collection of objects, such as numbers, letters, colors, names, and so on, individually called elements. You use mathematical operations, such as membership, ...
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