1. Methods of Assigning Probabilities l Classical Probability; l Empirical Probability; and l Subjective Probability l P (A) = N(A) / N l P (X) = ƒ (X) / n l a measure of personal conviction that an event will occur

2. Classical Probability Assignment The Classical Probability Assignment is often associated with gambling and games of chance. P (A) = N(A) / N where, N(A) = Number of ways event A can occur N = Total number of possible outcomes

3. Empirical Probability Assignment The Empirical or Relative Frequency Method of assigning probability uses past data that have been empirically observed. It notes the frequency with which some event has occurred in the past and estimates the probability of its reoccurrence on the basis of historic data.

4. Empirical Probability Assignment P (X) = ƒ (X) / n Where, ƒ (X) = Number of times event X has occurred in the past n = Total number of observations

5. Subjective Probability Assignment A Subjective Probability Assignment is an individual’s assessment of the likelihood of a particular outcome. The Subjective Probability Method is used when historic data are not available.