Question

Assigning Probabilities: which kind of probability it is (empirical, classical, or subjective) in the statement below? a. "there is a 25% chance that Duane Reade and CVS drugstore will merge" b. "Commercial rocket launches have a 95% success rate" c. "The probability of rolling three sevens in a row with two dice (and adding the two faces) is 0.0046

Answer 1

a)"there is 25% chance that Duane Reade and CVS drugstore will merge " - This is subjective probability .

Note : Subjective probability is calculated when no past information is provided , it is estimated.

b) "commercial rocket launches have a 95 % success rate " - This is emperical probability

Note : Emperical probability is calculated from past experiences. It is calculated by the formula.

Emperical probability = Number of success / Total number of observations .

c) "probability of rolling three sevens in a row with two dice is 0.0046" - This is classical probability

Note : Classical probability is calculated when the outcomes are equally likely. It is calculated as

Classical probability = Number of outcomes favorable to an event / number of possible outcomes .