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Monte

Probability rules

  1. Read it, not yet
  2. Practice it, not yet
  3. Master it, not yet

Or: add, then subtract the overlap. And: multiply. Given: count only inside what you were told. Mutually exclusive: can't both happen. Independent: one says nothing about the other.

Why it matters

Probability is honest bookkeeping: list what can happen, then ask what share of it is the thing you care about.

Many costly mistakes come from mixing up P(A given B) and P(B given A).

  • MedicineA 99% accurate test for something rare is often wrong when it says yes.
  • FraudIf fraud is rare, most flagged transactions are honest.
  • EverydayFive separate 20% risks: the chance at least one happens is 67%, not 100%.

Tennis example

Break-point conversion is a conditional probability: P(win the point | break point). Count only the break points. Convert 20 of 50 and that is 40%.

Coin: P(heads) = 1/2

Flips 0

Heads0.0%
Tails0.0%

Flip it. The dark line marks the true 50%.

Two heads in a row (and means multiply): 0 of 0 pairs. True odds 0.5 × 0.5 = 25%.

Die: each face 1/6 (16.7%)

Rolls 0

Face 10.0%
Face 20.0%
Face 30.0%
Face 40.0%
Face 50.0%
Face 60.0%

Turn this on to watch P(2 | even) head toward 1/3.

Check yourself

  1. Two coins and a die: how many outcomes?

  2. One die roll: P(not a 1 or 2)?

  3. A = {1, 2, 3}, B = {3, 4} on one die roll. P(A or B)?

The trap

The mistake people make most on this one.

Mutually exclusive events are not independent. If A happens B cannot, so knowing A changes B completely.

Formulas

5 formulas and a way to remember them.
Basics
0 ≤ P(A) ≤ 1, all outcomes add to 1, P(not A) = 1 − P(A)
Or
P(A or B) = P(A) + P(B) − P(A and B)
Given
P(A | B) = P(A and B) / P(B)
And
P(A and B) = P(A) × P(B | A); if independent, P(A) × P(B)
Tree
Multiply along a branch, add branches with the same ending
Remember it
Or: two guest lists, count overlaps once. And: a combo lock, every dial must hit. Given: a filter, then count.

Watch and go deeper

3 free videos and pages.