BMGT 230 Chapter 5: Chapter 5-Randomness and Probability

• School: University of Maryland
• Department: Business and Management
• Course: BMGT 230
• Professor: Radu Lazar

Document Summary

Probability: the probability of an event is a number between 0 and 1 that reports the likelihood of the event"s occurrence. A probability can be derived from a model (such as equally likely outcomes), from the long-run relative frequency of the event"s occurrence, or fomr subjective degrees of belief. We write p(a) for the probability of the event a. Independence (informally): two events are independent if the fact that one event occurs does not change the probability of the other. Law of large numbers (lln): the law of large numbers states that the long-run relative frequency of repeated, independent events settles down to the true relative frequency as the number of trials increases. Empirical probability: when the probability comes from the long-run relative frequency of the event"s occurrence, it is an empirical probability. The law of large numbers says that the relative frequency of a random event settles down to a single number in the long run.