Binomial distribution

When a coin is flipped, the outcome is either a head or a tail; when a magician guesses
the card selected from a deck, the magician can either be correct or incorrect; when a
baby is born, the baby is either born in the month of March or is not. In each of these
examples, an event has two mutually exclusive possible outcomes. For convenience, one
of the outcomes can be labeled "success" and the other outcome "failure." If an event
occurs N times (for example, a coin is flipped N times), then the binomial distribution can
be used to determine the probability of obtaining exactly r successes in the N outcomes.
The binomial probability for obtaining r successes in N trials is:

where P(r) is the probability of exactly r successes, N is the number of events, and π is
the probability of success on any one trial. This formula for the binomial distribution
assumes that the events:
1. are dichotomous (fall into only two categories)
2. are mutually exclusive
3. are independent and
4. are randomly selected
Consider this simple application of the binomial distribution: What is the probability of
obtaining exactly 3 heads if a fair coin is flipped 6 times?
For this problem, N = 6, r = 3, and π = 0.5. Therefore,

Two binomial distributions are shown below. Notice that for π = 0.5, the distribution is
symmetric whereas for π = 0.3, the distribution has a positive skew.

Often the cumulative form of the binomial distribution is used. To determine the
probability of obtaining 3 or more successes with n=6 and π = 0.3, you compute P(3) +
P(4) + P(5) + P(6). This can also be written as:
Sums of binomials
If X ~ B(n, p) and Y ~ B(m, p) are independent binomial variables, then X + Y is again a
binomial variable; its distribution is

Bernoulli distribution
The Bernoulli distribution is a special case of the binomial distribution, where n = 1.
Symbolically, X ~ B(1, p) has the same meaning asX ~ Bern(p). Conversely, any binomial
distribution, B(n, p), is the sum of n independent Bernoulli trials, Bern(p), each with the
same probability p.

Normal approximation

Binomial PDF and normal approximation for n = 6 and p = 0.5

If n is large enough, then the skew of the distribution is not too great. In this case, if a
suitable continuity correction is used, then an excellent approximation to B(n, p) is given
by the normal distribution

The approximation generally improves as n increases (at least 20) and is better when p is
not near to 0 or 1.[6] Various rules of thumb may be used to decide whether n is large
enough, and p is far enough from the extremes of zero or unity:
 One rule is that both x=np and n(1 − p) must be greater than 5. However, the
specific number varies from source to source, and depends on how good an
approximation one wants; some sources give 10 which gives virtually the same
results as the following rule for large n until n is very large (ex: x=11, n=7752).
 That rule[6] is that for n > 5 the normal approximation is adequate if

 Another commonly used rule holds that the normal approximation is appropriate
only if everything within 3 standard deviations of its mean is within the range of
possible values, that is if

 Also as the approximation generally improves, it can be shown that the inflection
points occur at
The following is an example of applying a continuity correction: Suppose one wishes to
calculate Pr(X ≤ 8) for a binomial random variable X. IfY has a distribution given by the
normal approximation, then Pr(X ≤ 8) is approximated by Pr(Y ≤ 8.5). The addition of 0.5
is the continuity correction; the uncorrected normal approximation gives considerably
less accurate results.

This approximation, known as de Moivre–Laplace theorem, is a huge time-saver (exact

calculations with large n are very onerous); historically, it was the first use of the normal
distribution, introduced in Abraham de Moivre's book The Doctrine of Chances in 1738.
Nowadays, it can be seen as a consequence of the central limit theorem since B(n, p) is a
sum of n independent, identically distributedBernoulli variables with parameter p. This
fact is the basis of a hypothesis test, a "proportion z-test," for the value of p using x/n,
the sample proportion and estimator of p, in a common test statistic.[7]

For example, suppose you randomly sample n people out of a large population and ask
them whether they agree with a certain statement. The proportion of people who agree
will of course depend on the sample. If you sampled groups of n people repeatedly and
truly randomly, the proportions would follow an approximate normal distribution with
mean equal to the true proportion p of agreement in the population and with standard
deviation σ = (p(1 − p)/n)1/2. Large sample sizes n are good because the standard
deviation, as a proportion of the expected value, gets smaller, which allows a more
precise estimate of the unknown parameter p.

Poisson approximation
The binomial distribution converges towards the Poisson distribution as the number of
trials goes to infinity while the product np remains fixed. Therefore the Poisson
distribution with parameter λ = np can be used as an approximation to B(n, p) of the
binomial distribution if n is sufficiently large and p is sufficiently small. According to two
rules of thumb, this approximation is good if n ≥ 20 and p ≤ 0.05, or if n ≥ 100
and np ≤ 10
In probability theory and statistics, the Poisson distribution (pronounced[pwasɔ̃])
(or Poisson law of small numbers[1]) is a discrete probability distribution that
expresses the probability of a number of events occurring in a fixed period of time if
these events occur with a known average rate andindependently of the time since the
last event. (The Poisson distribution can also be used for the number of events in other
specified intervals such as distance, area or volume.)
The distribution was first introduced by Siméon-Denis Poisson (1781–1840) and
published, together with his probability theory, in 1838 in his work Recherches sur la
probabilité des jugements en matière criminelle et en matière civile(“Research on the
Probability of Judgments in Criminal and Civil Matters”). The work focused on
certain random variables N that count, among other things, the number of discrete
occurrences (sometimes called “arrivals”) that take place during a time-interval of given
length.
If the expected number of occurrences in this interval is λ, then the probability that there
are exactly k occurrences (k being a non-negative integer, k = 0, 1, 2, ...) is equal to

where
 e is the base of the natural logarithm (e = 2.71828...)
  k is the number of occurrences of an event - the probability of which is given by
the function
 k! is the factorial of k
 λ is a positive real number, equal to the expected number of occurrences that
occur during the given interval. For instance, if the events occur on average 4
times per minute, and you are interested in probability for k times of events
occurring in a 10 minute interval, you would use as your model a Poisson
distribution with λ = 10×4 = 40.
As a function of k, this is the probability mass function. The Poisson distribution can be
derived as a limiting case of the binomial distribution.The Poisson distribution can be
applied to systems with a large number of possible events, each of which is rare. A
classic example is the nuclear decay of atoms. The Poisson distribution is sometimes
called a Poissonian, analogous to the term Gaussian for a Gauss or normal distribution.