Actuarial Notes

Combinatorics

Study guides: Exam P-1, Exam MAS-I

Combinatorics is a branch of Discrete Mathematics concerned with counting the number of ways to arrange, select, or partition objects.

  • It provides the tools needed to compute probabilities when outcomes are equally likely
  • The two fundamental problems are counting ordered arrangements (Permutations) and unordered selections (Combinations)
  • In probability, combinatorics determines the sizes of events and sample spaces: P(A) = |A| / |S| for uniform experiments

|\text{arrangements of } n \text{ objects}| = n!

= n \times (n-1) \times \cdots \times 2 \times 1

Counting Equally Likely Outcomes for a Lottery A lottery draws 3 numbers from \{1, 2, 3, 4, 5\} without replacement. How many equally likely outcomes are there if order does not matter?

Answer This is a combination problem (order irrelevant, no replacement): \binom{5}{3} = \frac{5!}{3!\,2!} = \frac{120}{6 \times 2} = 10 There are 10 equally likely outcomes, so each has probability 1/10 = 0.10.