AEB 6571 Econometric Methods I
Professor Charles B. Moss
Lecture II
Fall 2010
50
6
!
=
50!
6! (50
−
6)!
=15
,
890
,
700
(2)
e. This is a combinatorial.
It also is useful for binomial
arithmetic:
(
a
+
b
)
n
=
n
X
k
=0
n
k
!
a
k
b
n
−
k
(3)
B. De±nitions
1.
Sample Space
: The set of all possible outcomes. In the Texas
lotto scenario, the sample space is all possible 15,890,700 sets
of 6 numbers which could be drawn.
2.
Event
: A subset of the sample space. In the Texas lotto sce-
nario, possible events include single draws such as 35,20,15,1,5,45
or complex draws such as all possible lotto tickets including
35,20,15. Note that this could be 35,20,15,1,2,3, 35,20,15,1,2,4,.
3.
Simple Event
: An event which cannot be a union of other
events. In the Texas lotto scenario, this is a single draw such
as 35,20,15,1,5,45.