What is conditional probability?

Conditional probability is defined as the probability of an event occurring given that another event has already happened. This concept is critical in statistics and probability theory, as it allows for a more refined understanding of how the likelihood of one event may change in the context of another related event.

In situations where one event influences the probability of another, conditional probability provides insights that enable better decision-making. For instance, if you want to find the probability of someone being a graduate student given that they are enrolled at the University of Central Florida, you would use conditional probability since the two events are related.

This concept is fundamental in various fields, including finance, insurance, and the sciences, where understanding dependencies between events can significantly affect outcomes or predictions.