Week 5- probability

Created by: jf00632
Created on: 19-01-19 11:41

How to calculate the probability from a table

LOOK AT NOTES

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The probability firm x will not recieve any orders for its products tomorrow is 0.2. What is the P that it will receive an order tomorrow

1-0.2=8

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The probability a business sales will increse next year compared to this year is 60% and the probability its sales will remain the same next year is 20% what is the probability the firms sales will decrease next yr compared to this year?

60+20=80 100-80=20 (0.2)

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What is the P that the business sale price will stay the same or go down?

just add both probability of these togehter- 0.2+0.2=0.4

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How do you find one quarter of something?

divide by 4

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What is the expected value of sales?

LOOK AT NOTES

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A project may result in [profits of 20,000 or 12,000 or in a loss of 5000 with probabilites of 0.3, 05, and o2. what is the expected profit?

SO workout each probability individually (20,000x0.3) (12000x0.5) (-5000x0.2) then add them all together = 11,000

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How do you create probability trees?- step 1

Write down all of the questions/ companies options

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How do you create probability trees? - step 2

Then workout the probability of the opposite option

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How do you create probability trees- step 3

Add money (if in question)

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step 4

prob of rival entering x profit if they enter + prob if rival does not enter x prof if rival does not enter

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Other cards in this set

Card 2

Front

The probability firm x will not recieve any orders for its products tomorrow is 0.2. What is the P that it will receive an order tomorrow

Back

1-0.2=8

Card 3

Front

Back

Card 4

Front

What is the P that the business sale price will stay the same or go down?

Back

Card 5

Front

How do you find one quarter of something?

Back

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Week 5- probability