Table of contents
- 1. Introduction to Statistics53m
- 2. Describing Data with Tables and Graphs2h 1m
- 3. Describing Data Numerically1h 48m
- 4. Probability2h 26m
- 5. Binomial Distribution & Discrete Random Variables2h 55m
- 6. Normal Distribution & Continuous Random Variables1h 48m
- 7. Sampling Distributions & Confidence Intervals: Mean1h 17m
- 8. Sampling Distributions & Confidence Intervals: Proportion1h 20m
- 9. Hypothesis Testing for One Sample1h 8m
- 10. Hypothesis Testing for Two Samples2h 8m
- 11. Correlation48m
- 12. Regression1h 4m
- 13. Chi-Square Tests & Goodness of Fit1h 30m
- 14. ANOVA1h 4m
4. Probability
Bayes' Theorem
Struggling with Statistics for Business?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A rare condition affects 1 out of every 100 people. The test for this condition has the following probabilities: If a person has the condition, the test is correct 95% of the time. If a person does not have the condition, the test gives a wrong result 10% of the time. If A is the event 'tested positive' and B is the event 'has condition,' find P(B'), P(AIB), and P(A|B').
A
P(B') = 0.99; P(A|B) = 0.95; P(A|B') = 0.10
B
P(B') = 0.99; P(A|B) = 0.95; P(A|B') = 0.01
C
P(B') = 0.95; P(A|B) = 0.99; P(A|B') = 0.01
D
P(B') = 0.95; P(A|B) = 0.99; P(A|B') = 0.10

1
Step 1: Understand the problem and identify the key probabilities. The problem involves conditional probabilities and complements. The condition affects 1 out of 100 people, so the probability of having the condition, P(B), is 0.01. The complement, P(B'), is the probability of not having the condition, which is 1 - P(B).
Step 2: Calculate P(B'). Since P(B) = 0.01, the complement is P(B') = 1 - 0.01. This represents the probability that a person does not have the condition.
Step 3: Identify P(A|B). This is the probability that a person tests positive (event A) given that they have the condition (event B). The problem states that the test is correct 95% of the time for those with the condition, so P(A|B) = 0.95.
Step 4: Identify P(A|B'). This is the probability that a person tests positive (event A) given that they do not have the condition (event B'). The problem states that the test gives a wrong result 10% of the time for those without the condition, so P(A|B') = 0.10.
Step 5: Summarize the results. The probabilities are P(B') = 0.99, P(A|B) = 0.95, and P(A|B') = 0.10. These values can now be used for further analysis or decision-making.
Related Videos
Related Practice