Quantitative Literacy Practice Exam 2025 – Comprehensive Preparation Guide

The probability of an event is calculated by determining the ratio of the number of favorable outcomes to the total number of possible outcomes. This concept is foundational in the field of probability. It provides a quantitative measure of how likely an event is to occur relative to all possible events.

Let's break this down further: the number of favorable outcomes refers to the specific outcomes we are interested in (for example, getting a heads in a coin toss), while the total number of possible outcomes includes all outcomes that can happen (in a coin toss, this would be heads and tails, so there are two possible outcomes).

So, if there were three favorable outcomes and ten possible outcomes, the probability would be calculated as \( \frac{3}{10} \), which effectively quantifies the chance of the event occurring.

This understanding of probability is crucial not only for theoretical statistics but also for practical applications in diverse fields, such as finance, science, and social sciences, where assessing risks and making informed decisions based on likelihood is essential.