CHAPTER 1

Basics of Probability

Chapter Objectives

•   Introduce fundamental concepts of probability

•   Define basic terms

•   Introduce counting techniques including permutations and combinations

•   Provide an axiomatic foundation for the study of probability

•   Introduce addition and multiplication rules

•   Introduce Bayes’ theorem

1.1   Introduction

Probability deals with describing random experiments. A random experiment is an activity in which the result is not known until the activity is performed. Most everything in life is a random experiment. For example, when you take a test, you don’t know your grade until the test is graded. If you invest money in the stock market, you don’t know exactly how much you will gain or lose until you ...

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