Statistics for Business: Decision Making and Analysis, 3rd Edition

Chapter Summary

A joint probability gives the chance for an intersection of events, such as those associated with cells in a table. A marginal probability gives the chance of a single event. A conditional probability is the chance for an event to occur once it is known that another event has occurred. The Multiplication Rule for the probability of two events occurring simultaneously is P(A and B) = P(A) × P(B|A). This rule does not presume independence. For independent events, P(B|A) = P(B) and P(A|B) = P(A). Probability trees and probability tables organize calculations involving conditional probabilities. Bayes’ Rule shows how to get P(A|B) from P(B|A) and P(B|A^c) without organizing probabilities into a table or tree.

Key Terms

• Bayes’ Rule ...