Describe The Fundamental Concepts Of Probability

Probability and Decision Analysis
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Probability and Decision Analysis
Fundamental Concepts of Probability
In practice, it is not possible to determine the outcome of any random event prior to its occurrence. Therefore, the actual outcome can be determined by chance and it may be one of the different possible outcomes. In probability, statisticians and mathematicians study random events by sampling, organizing, analysing, and interpreting numerical data to extrapolate meaning. In basic terms, probability is the chance or likelihood that one of more events will happen divided by the possible number of outcomes (Boston University School of Public Health, 2016). For instance, the probability of one picking a black ball in a bag containing 4 red balls and 3 black balls will be 3 (the number of black balls) divided by the total number of balls (4 + 3). Therefore, the probability of picking a black ball will be 3/7. It is often expressed as proportions ranging from zero to one (0-1) or can be expressed as percentages (0%-100%) (Boston University School of Public Health, 2016). The fundamental concepts of probability have found applications in weather forecasting, genetics, stock market analysis, and an understanding a number of other daily events.
Probability Distribution Concepts Using Examples
A probability distribution is the possibility of arriving at the possible values assumed by a random variable. This means that the values of such variables differ depending on the principal probability distribution (Kenton, 2018). Probability distributions are of two forms: discrete and continuous probability distributions. Discrete distributions or mass functions often assume discrete values. They are called discrete since there is no possibility of having a numerical value in between. For instance, tossing a coin will get either a head or a tail.
Contrary, in continuous distribution or density function, the number value will be infinite between two values. For instance, measuring...