DECS 430-A Business Analytics I Probability Basics The basic rules of probability: Pr(A) + Pr(not-A) = 1; Pr(A and B) + Pr(A and not-B) = Pr(A), and so on Pr(A or B) = 1 – Pr(not-A and not-B) Pr(A or B) = Pr(A) + Pr(B) – Pr(A and B) The basic rules of conditional probability: Definition: Pr(A|B) = Pr(A and B) / Pr(B) Pr(A and B) = Pr(A)∙Pr(B|A) = Pr(B)∙Pr(A|B) ; Pr(A and B and C) = Pr(A)∙Pr(B|A)∙Pr(C|A and B), and so on when A and B are independent, Pr(A and B) = Pr(A)∙Pr(B)