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Lesson 10 of 20

Joint Probability of a Number of Independent Events

If two events are independent, then the joint probability of these two independent events is calculated as:

P(A and B) = P(A) x P(B)

Example

Suppose we roll two dice. The joint probability of getting a 1 on first die and a 6 on the second die is given as follows:

Probability of getting a 1 on first die, P(A) = 1/6

Probability of getting a 6 on second die, P(B) = 1/6

P(A and B) = 1/6 * 1/6 = 1/36 = 0.0278

The same rule can be applied to calculate the joint probability of any number of independent events. For example, if there are three independent events, A, B and C, their joint probability will be:

P(A and B and C) = P(A) x P(B) x P(C)

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Dependent Vs. Independent Events in Probability

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Unconditional Probability Using Total Probability Rule

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Probability Concepts

20 lessons

Lessons

1
Probability - Basic Terminology
2
Two Defining Properties of Probability
3
Empirical, Subjective and Priori Probability
4
State the Probability of an Event as Odds
5
Unconditional and Conditional Probabilities
6
Multiplication, Addition and Total Probability Rules
7
Joint Probability of Two Events
8
Probability of Atleast One of the Events Occuring
9
Dependent Vs. Independent Events in Probability
10
Joint Probability of a Number of Independent Events
11
Unconditional Probability Using Total Probability Rule
12
Expected Value of Investments
13
Calculating Variance and Standard Deviation of Stock Returns
14
Conditional Expected Values
15
Calculating Covariance and Correlation
16
Expected Value of a Portfolio
17
Variance and Standard Deviation of a Portfolio
18
Bayes’ Theorem
19
Multiplication Rule of Counting
20
Permutation and Combination Formula

Quizzes

Probablity Concepts
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