![]() O’Reilly members experience live online training, plus books, videos, and digital content from nearly 200 publishers. Get Risk Assessment: Tools, Techniques, and Their Applications now with the O’Reilly learning platform. For instance, if you flip a coin, there are two possible ways it can land, either heads or tails. In order to understand probability, you must know how many possible ways a thing can happen. ![]() For example, if you toss a coin there is a 50 chance of showing heads and a 50 chance of showing. Īlthough these rules of probability are extremely few and simple, they are incredibly powerful in application. Probability is the likelihood that any event will occur. Some textbooks will use mathematical symbols for the words “and” and “or” and the expression would look like. That is, the risk is a function of the probability of an event occurring. In this case, we express this as P(A or B) = P(A) + P(B). terms of low-frequency high-consequence events and what actions can be taken to. There is also a rule that applies to two events, A and B, which are mutually exclusive, that is, the two events cannot occur at the same time. This expression is the first basic rule of probability (3). Another way to express this is 0 ≤ P(A) ≤ 1, where A is the event. Zero means that something cannot happen (impossible) and 1 or 100% means it is sure to happen. Probability is always a number between 0 and 1 or between 0% and 100%. Probability is usually expressed as a fraction with the denominator representing the total number of ways things can occur and the numerator representing the number of things that you are hoping will occur. Some other terms or words used in place of probability are chance, likelihood, uncertainty, and odds. Probability measures the uncertainty associated with the outcomes of a random experiment. ![]() For example, suppose a person is considering to invest in a company which is engaged in the new exploration of offshore oil. ADVERTISEMENTS: Thus, if possibility of an outcome occurring is 1/4 or 0.25, this means that there is 1 chance in 4 or 25 per cent chance for the outcome to occur. Probability is defined as the likelihood that the event will occur. At the same time, they have increased the level of exposure to risk should a disruption to the system occur, particularly in the transport and power sectors. The probability means the likelihood of occurring of an event. ![]()
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