4-2

Question 1

what are the 3 most used approaches for assigning probabilities

Answer 1

1. classical Method
2. Relative frequency Method
3. Subjective Method

Question 2

What are the 2 basic requirements that must be meet when assigning probabilities

Answer 2

1. The prob assigned to each experimental outcome must be between 0 and 1 inclusively

O <= P(Ei) <= 1 for all i

2. Sum of the prob for all experimental outcomes must equal 1.0

P(E1) + P(E2) + P(E3) …….P(En) = 1

Question 3

When should you use the Classical Method for assigning probabilities?

Answer 3

use when: all experimental outcomes are equally likely

- 2 basic requirements are satisfied automatically

Question 4

When should you use the Relative Frequency Method f for assigning probabilities?

Answer 4

Use when: data are available to estimate the proportion of time and the experimental outcome will occur if the experiment is repeated a large # of times.

• 2 basic requirements are met

Question 5

When should you use the Subjective Method for assigning probabilities?

Answer 5

Use when: we cannot realistically assume that the experimental outcomes are equally likely and when little relevant data is available
- uses the degree of belief

• use Bayes theorem to refine your estimates