Use of Cycles for Technical Analysis
Cycles are trends or patterns that may be exhibited by the securities market.... Read More
Two or more events are independent if the occurrence of one event has no influence on the occurrence of the other event(s). Let us put this in annotations:
$$ \text P( \text A | \text B) = \text P(\text A) $$
or
$$ \text P(\text B | \text A) = \text P(\text B) $$
If this condition is not satisfied, the events are said to be dependent.
Suppose you rolled a die and flipped a coin, the probability of getting any number face on the die would not influence the probability of getting a head or a tail on the coin. The two events are independent.
Suppose you have a bag containing 8 green balls and 5 blue balls. If you draw a blue ball without replacing it, the probability of drawing another blue ball in your second attempt is greatly changed because you drew a blue ball the first time. Such events are said to be dependent.
Question
Mike Jamerson tosses a coin twice. What is the probability of getting a head on the first toss and a head on the second toss?
A. 1/2
B. 1/4
C. 2/3
Solution
The correct answer is B.
The coin has no memory. Therefore, the first outcome has no influence on the second outcome. Thus:
$$ \begin{align*}
\text P(\text{head and head}) & = \text P(\text H) * \text P(\text H) \\
& =\cfrac {1}{2} * \cfrac {1}{2} \\
& = \cfrac {1}{4} \\
\end{align*} $$Note: If two events are independent:
$$ \text P(\text{AB}) =\text P( \text A) * \text P(\text B) $$
Reading 8 LOS 8g
Distinguish between dependent and independent events