Lecture 03 Slides

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May not be scanned, copied

Slide 1
or duplicated, or posted to a publicly accessible website, in whole or in part.
2015 Cengage Learning. All Rights Reserved. May not be scanned, copied
Slide 2
Managers often base their decisions on an analysis
of uncertainties such as the following:
What are the chances that sales will decrease

if we increase prices?
What is the likelihood a new assembly method

will increase productivity?
What are the odds that a new investment will

be profitable?
Slide 3
Probability is a numerical measure of the likelihood
that an event will occur.
Probability values are always assigned on a scale

from 0 to 1.
A probability near zero indicates an event is quite

unlikely to occur.
A probability near one indicates an event is almost

certain to occur.
Slide 4
Increasing Likelihood of Occurrence
0 .5 1
Probability:
The event The occurrence The event

is very of the event is is almost
unlikely just as likely as certain
to occur. it is unlikely. to occur.
Slide 5
In statistics, the notion of an experiment differs
somewhat from that of an experiment in the
physical sciences.
In statistical experiments, probability determines

outcomes.
Even though the experiment is repeated in exactly

the same way, an entirely different outcome may
occur.
For this reason, statistical experiments are some-

2015
times called random experiments.
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Slide 6
An experiment is any process that generates well-
defined outcomes.
The sample space for an experiment is the set of

all experimental outcomes.
An experimental outcome is also called a sample

point.
Slide 7
Experiment Experiment Outcomes
Toss a coin Head, tail
Inspection a part Defective, non-defective
Conduct a sales call Purchase, no purchase
Roll a die 1, 2, 3, 4, 5, 6
Play a football game Win, lose, tie
Slide 8
Investment Gain or Loss
in 3 Months (in $1000s)
Markley Oil Collins Mining
10 8
5 -2
0
-20
Slide 9
Slide 10
Markley Oil: n1 = 4
Collins Mining: n2 = 2
Total Number of
Experimental Outcomes: n1n2 = (4)(2) = 8
Slide 11
Markley Oil Collins Mining Experimental
(Stage 1) (Stage 2) Outcomes
Gain 8 (10, 8) Gain $18,000
(10, -2) Gain $8,000
Gain 10 Lose 2
Gain 8 (5, 8) Gain $13,000
Lose 2 (5, -2) Gain $3,000

Gain 5
Gain 8
(0, 8) Gain $8,000
Even
(0, -2) Lose $2,000
Lose 20 Lose 2
Gain 8 (-20, 8) Lose $12,000
Lose 2 (-20, -2) Lose $22,000
Slide 12
N N!
CnN
n n !(N - n )!
Slide 13
N N!
PnN n !
n (N - n )!
Slide 14
1. The probability assigned to each experimental
outcome must be between 0 and 1, inclusively.
0 < P(Ei) < 1 for all i
where:
Ei is the ith experimental outcome
and P(Ei) is its probability
Slide 15
2. The sum of the probabilities for all experimental
outcomes must equal 1.
P(E1) + P(E2) + . . . + P(En) = 1
where:
n is the number of experimental outcomes
Slide 16
Classical Method
Assigning probabilities based on the assumption
of equally likely outcomes
Relative Frequency Method

Assigning probabilities based on experimentation
or historical data
Subjective Method
Assigning probabilities based on judgment
Slide 17
Slide 18
Number of Number
Polishers Rented of Days
0 4
1 6
2 18
3 10
4 2
Slide 19
Number of Number
Polishers Rented of Days Probability
0 4 .10
1 6 .15
2 18 .45 4/40
3 10 .25
4 2 .05
40 1.00
Slide 20
Slide 21
Exper. Outcome Net Gain or Loss Probability
(10, 8) $18,000 Gain .20
(10, -2) $8,000 Gain .08
(5, 8) $13,000 Gain .16
(5, -2) $3,000 Gain .26
(0, 8) $8,000 Gain .10
(0, -2) $2,000 Loss .12
(-20, 8) $12,000 Loss .02
(-20, -2) $22,000 Loss .06
Slide 22
or duplicated, or posted to a publicly accessible website, in whole or in part. 1.00
An event is a collection of sample points.
The probability of any event is equal to the sum of

the probabilities of the sample points in the event.
If we can identify all the sample points of an

experiment and assign a probability to each, we
can compute the probability of an event.
Slide 23
Event M = Markley Oil Profitable
M = {(10, 8), (10, -2), (5, 8), (5, -2)}
P(M) = P(10, 8) + P(10, -2) + P(5, 8) + P(5, -2)
= .20 + .08 + .16 + .26
= .70
Slide 24
Event C = Collins Mining Profitable
C = {(10, 8), (5, 8), (0, 8), (-20, 8)}
P(C) = P(10, 8) + P(5, 8) + P(0, 8) + P(-20, 8)
= .20 + .16 + .10 + .02
= .48
Slide 25
Complement of an Event
Union of Two Events
Intersection of Two Events
Mutually Exclusive Events
Slide 26
The complement of event A is defined to be the event
consisting of all sample points that are not in A.
The complement of A is denoted by Ac.
Sample
Event A Ac Space S
Venn
Diagram
Slide 27
The union of events A and B is the event containing
all sample points that are in A or B or both.
The union of events A and B is denoted by A B
Sample
Event A Event B Space S
Slide 28
M C = Markley Oil Profitable
or Collins Mining Profitable (or both)
M C = {(10, 8), (10, -2), (5, 8), (5, -2), (0, 8), (-20, 8)}
P(M C) = P(10, 8) + P(10, -2) + P(5, 8) + P(5, -2)
+ P(0, 8) + P(-20, 8)
= .20 + .08 + .16 + .26 + .10 + .02
2015 = Reserved.
Cengage Learning. All Rights .82 May not be scanned, copied
Slide 29
The intersection of events A and B is the set of all
sample points that are in both A and B.
The intersection of events A and B is denoted by A
Sample
Intersection of A and B
Slide 30
and Collins Mining Profitable
M C = {(10, 8), (5, 8)}
P(M C) = P(10, 8) + P(5, 8)
= .20 + .16
= .36
Slide 31
The addition law provides a way to compute the
probability of event A, or B, or both A and B occurring.
The law is written as:
P(A B) = P(A) + P(B) - P(A B
Slide 32
or Collins Mining Profitable
We know: P(M) = .70, P(C) = .48, P(M C) = .36
Thus: P(M C) = P(M) + P(C) - P(M C)
= .70 + .48 - .36
= .82
(This result is the same as that obtained earlier
using the definition of the probability of an event.)
Slide 33
Two events are said to be mutually exclusive if the
events have no sample points in common.
Two events are mutually exclusive if, when one event

occurs, the other cannot occur.
Sample
Slide 34
If events A and B are mutually exclusive, P(A B = 0.
The addition law for mutually exclusive events is:
P(A B) = P(A) + P(B)
There is no need to
include - P(A B
Slide 35
The probability of an event given that another event
has occurred is called a conditional probability.
The conditional probability of A given B is denoted

by P(A|B).
A conditional probability is computed as follows :
P( A B)
P( A|B)
P( B)
Slide 36
P(C| M ) = Collins Mining Profitable
given Markley Oil Profitable
We know: P(M C) = .36, P(M) = .70
P(C M ) .36
Thus: P(C | M ) .5143
P( M ) .70
Slide 37
The multiplication law provides a way to compute the
probability of the intersection of two events.
P(A B) = P(B)P(A|B)
Slide 38
and Collins Mining Profitable
We know: P(M) = .70, P(C|M) = .5143
Thus: P(M C) = P(M)P(M|C)
= (.70)(.5143)
= .36
(This result is the same as that obtained earlier
using the definition of the probability of an event.)
Slide 39
Collins Mining
Markley Oil Profitable (C) Not Profitable (Cc) Total
Profitable (M) .36 .34 .70

Not Profitable (Mc) .12 .18 .30
Total .48 .52 1.00
Joint Probabilities
(appear in the body
Marginal Probabilities
of the table)
(appear in the margins
of the table)
Slide 40
If the probability of event A is not changed by the
existence of event B, we would say that events A
and B are independent.
Two events A and B are independent if:
P(A|B) = P(A) or P(B|A) = P(B)
Slide 41
The multiplication law also can be used as a test to see
if two events are independent.
P(A B) = P(A)P(B)
Slide 42
Are events M and C independent?
Does P(M C) = P(M)P(C) ?
We know: P(M C) = .36, P(M) = .70, P(C) = .48
But: P(M)P(C) = (.70)(.48) = .34, not .36
Hence: M and C are not independent.
Slide 43
Do not confuse the notion of mutually exclusive
events with that of independent events.
Two events with nonzero probabilities cannot be

both mutually exclusive and independent.
If one mutually exclusive event is known to occur,

the other cannot occur.; thus, the probability of the
other event occurring is reduced to zero (and they
are therefore dependent).
Two events that are not mutually exclusive, might

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Reserved. May not be scanned, copied
Slide 44
Application
Prior New Posterior
of Bayes
Probabilities Information Probabilities
Theorem
Slide 45
Slide 46
A1 = town council approves the zoning change
A2 = town council disapproves the change
P(A1) = .7, P(A2) = .3
Slide 47
Slide 48
P(B|A1) = .2 P(B|A2) = .9
P(BC|A1) = .8 P(BC|A2) = .1
Slide 49
Town Council Planning Board Experimental
Outcomes
P(B|A1) = .2
P(A1 B) = .14
P(A1) = .7
c
P(B |A1) = .8 P(A1 Bc) = .56
P(B|A2) = .9
P(A2 B) = .27
P(A2) = .3
c
P(B |A2) = .1 P(A2 Bc) = .03
or duplicated, or posted to a publicly accessible website, in whole or in part. 1.00 Slide 50
P( Ai )P( B| Ai )
P( Ai |B)
P( A1 )P( B| A1 ) P( A2 )P( B| A2 ) ... P( An )P( B| An )
Slide 51
P( A1 )P( B| A1 )
P( A1 |B)
P( A1 )P( B| A1 ) P( A2 )P( B| A2 )
(. 7 )(. 2 )

(. 7 )(. 2 ) (. 3)(. 9)
= .34
Slide 52
Slide 53
Slide 54
(1) (2) (3) (4) (5)
Prior Conditional
Events Probabilities Probabilities
Ai P(Ai) P(B|Ai)
A1 .7 .2
A2 .3 .9
1.0
Slide 55
Slide 56
(1) (2) (3) (4) (5)
Prior Conditional Joint
Events Probabilities Probabilities Probabilities
Ai P(Ai) P(B|Ai) P(Ai I B)
A1 .7 .2 .14
A2 .3 .9 .27
.7 x .2
1.0
Slide 57
Slide 58
Slide 59
(1) (2) (3) (4) (5)
Prior Conditional Joint
Events Probabilities Probabilities Probabilities
Ai P(Ai) P(B|Ai) P(Ai I B)
A1 .7 .2 .14
A2 .3 .9 .27
1.0 P(B) = .41
Slide 60
P( Ai B)
P( Ai | B)
P( B)
Slide 61
(1) (2) (3) (4) (5)
Prior Conditional Joint Posterior
Events Probabilities Probabilities Probabilities Probabilities
Ai P(Ai) P(B|Ai) P(Ai I B) P(Ai |B)
A1 .7 .2 .14 .3415
A2 .3 .9 .27 .6585
1.0 P(B) = .41 1.0000
.14/.41
Slide 62
.40
.30
.20
.10
0 1 2 3 4
Slide 63
A random variable is a numerical description of the
outcome of an experiment.
A discrete random variable may assume either a

finite number of values or an infinite sequence of
values.
A continuous random variable may assume any

numerical value in an interval or collection of
intervals.
Slide 64
Let x = number of TVs sold at the store in one day,
where x can take on 5 values (0, 1, 2, 3, 4)
Slide 65
Let x = number of customers arriving in one day,
where x can take on the values 0, 1, 2, . . .
Slide 66
Question Random Variable x Type
Family x = Number of dependents Discrete

size reported on tax return
Distance from x = Distance in miles from Continuous
home to store home to the store site
Own dog x = 1 if own no pet; Discrete
or cat = 2 if own dog(s) only;
= 3 if own cat(s) only;
= 4 if own dog(s) and cat(s)
Slide 67
The probability distribution for a random variable
describes how probabilities are distributed over
the values of the random variable.
We can describe a discrete probability distribution

with a table, graph, or formula.
Slide 68
Two types of discrete probability distributions will
be introduced.
First type: uses the rules of assigning probabilities

to experimental outcomes to determine probabilities
for each value of the random variable.
Second type: uses a special mathematical formula

to compute the probabilities for each value of the
random variable.
Slide 69
The probability distribution is defined by a
probability function, denoted by f(x), that provides
the probability for each value of the random variable.
The required conditions for a discrete probability

function are:
f(x) > 0
f(x) = 1
Slide 70
There are three methods for assign probabilities to
random variables: classical method, subjective
method, and relative frequency method.
The use of the relative frequency method to develop

discrete probability distributions leads to what is
called an empirical discrete distribution.
example
on next
slide
Slide 71
Number 80/200
Units Sold of Days x f(x)
0 80 0 .40
1 50 1 .25
2 40 2 .20
3 10 3 .05
4 20 4 .10
200 1.00
Slide 72
Graphical
.50 representation
of probability
.40 distribution
Probability
.30
.20
.10
0 1 2 3 4
Values
2015 Cengage Learning. All Rights of Random
Reserved. May not beVariable x (TV
scanned, copied sales) Slide 73
In addition to tables and graphs, a formula that
gives the probability function, f(x), for every value
of x is often used to describe the probability
distributions.
Several discrete probability distributions specified

by formulas are the discrete-uniform, binomial,
Poisson, and hypergeometric distributions.
Slide 74
The discrete uniform probability distribution is the
simplest example of a discrete probability
distribution given by a formula.
The discrete uniform probability function is
f(x) = 1/n the values of the

random variable
are equally likely
where:
n = the number of values the random
variable may assume
Slide 75
The expected value, or mean, of a random variable
is a measure of its central location.
E(x) = = xf(x)
The expected value is a weighted average of the

values the random variable may assume. The
weights are the probabilities.
The expected value does not have to be a value the

random variable can assume.
Slide 76
The variance summarizes the variability in the
values of a random variable.
Var(x) = 2 = (x - )2f(x)
The variance is a weighted average of the squared

deviations of a random variable from its mean.
The weights are the probabilities.
The standard deviation, , is defined as the

positive square root of the variance.
Slide 77
x f(x) xf(x)
0 .40 .00
1 .25 .25
2 .20 .40
3 .05 .15
4 .10 .40
E(x) = 1.20
expected number of
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All Rights sold inMay
a day
not be scanned, copied
Slide 78
x x- (x - )2 f(x) (x - )2f(x)
0 -1.2 1.44 .40 .576
1 -0.2 0.04 .25 .010
2 0.8 0.64 .20 .128
3 1.8 3.24 .05 .162 TVs
4 2.8 7.84 .10 .784 squared
Variance of daily sales = 2 = 1.660
Standard deviation of daily sales = 1.2884 TVs
Slide 79
A probability distribution involving two random
variables is called a bivariate probability distribution.
Each outcome of a bivariate experiment consists of

two values, one for each random variable.
Example: rolling a pair of dice
When dealing with bivariate probability distributions,

we are often interested in the relationship between
the random variables.
Slide 80
Benefits Job Satisfaction (y)
Package (x) 1 2 3 Total
1 28 26 4 58
2 22 42 34 98
3 2 10 32 44
Total 52 78 70 200
Slide 81
Benefits Job Satisfaction (y)
Package (x) 1 2 3 Total
1 .14 .13 .02 .29
2 .11 .21 .17 .49
3 .01 .05 .16 .22
Total .26 .39 .35 1.00
Slide 82
x f(x) xf(x) x - E(x) (x - E(x))2 (x - E(x))2f(x)
1 0.29 0.29 -0.93 0.8649 0.250821
2 0.49 0.98 0.07 0.0049 0.002401
3 0.22 0.66 1.07 1.1449 0.251878
E(x) = 1.93 Var(x) = 0.505100
Slide 83
y f(y) yf(y) y - E(y) (y - E(y))2 (y - E(y))2f(y)
1 0.26 0.26 -1.09 1.1881 0.308906
2 0.39 0.78 -0.09 0.0081 0.003159
3 0.35 1.05 0.91 0.8281 0.289835
E(y) = 2.09 Var(y) = 0.601900
Slide 84
s f(s) sf(s) s - E(s) (s - E(s))2 (s - E(s))2f(s)
2 0.14 0.28 -2.02 4.0804 0.571256

3 0.24 0.72 -1.02 1.0404 0.249696
4 0.24 0.96 -0.02 0.0004 0.000960
5 0.22 1.10 0.98 0.9604 0.211376
6 0.16 0.96 1.98 3.9204 0.627264
E(s) = 4.02 Var(s) = 1.660552
Slide 85
Varxy = [Var(x + y) Var(x) Var(y)]/2
Slide 86
x 0.5051 0.7107038
y 0.6019 0.7758221
xy
xy xy 0.276776 0.526095
x y
0.526095
xy 0.954
0.7107038(0.7758221)
Slide 87
1. The experiment consists of a sequence of n
identical trials.
2. Two outcomes, success and failure, are possible

on each trial.
3. The probability of a success, denoted by p, does

not change from trial to trial.
stationarity
4. The trials are independent. assumption
Slide 88
Our interest is in the number of successes
occurring in the n trials.
We let x denote the number of successes

occurring in the n trials.
Slide 89
n!
f (x) p x (1 - p )( n - x )
x !(n - x )!
where:
x = the number of successes
p = the probability of a success on one trial
n = the number of trials
f(x) = the probability of x successes in n trials
n! = n(n 1)(n 2) .. (2)(1)
Slide 90
n!
f (x) p x (1 - p )( n - x )
x !(n - x )!
Probability of a particular
Number of experimental
sequence of trial outcomes
outcomes providing exactly
with x successes in n trials
x successes in n trials
Slide 91
Slide 92
Slide 93
Experimental Probability of
Outcome Experimental Outcome
(S, F, F) p(1 p)(1 p) = (.1)(.9)(.9) = .081
(F, S, F) (1 p)p(1 p) = (.9)(.1)(.9) = .081
(F, F, S) (1 p)(1 p)p = (.9)(.9)(.1) = .081
Total = .243
Slide 94
Using the
Let: p = .10, n = 3, x = 1 probability
function
n!
f ( x) p x (1 - p ) (n - x )
x !( n - x )!
3!
f (1) (0.1)1 (0.9)2 3(.1)(.81) .243
1!(3 - 1)!
Slide 95
Using a tree diagram
1st Worker 2nd Worker 3rd Worker x Prob.
L (.1) 3 .0010
Leaves (.1)
S (.9) 2 .0090
Leaves
(.1) L (.1) 2 .0090
Stays (.9)
S (.9) 1 .0810
L (.1) 2 .0090
Leaves (.1)
Stays S (.9) 1 .0810
(.9) L (.1)
1 .0810
Stays (.9)
Slide 96
S part.
or duplicated, or posted to a publicly accessible website, in whole or in (.9) 0 .7290
Statisticians have developed tables that give
probabilities and cumulative probabilities for a
binomial random variable.
These tables can be found in some statistics

textbooks.
With modern calculators and the capability of

statistical software packages, such tables are
almost unnecessary.
Slide 97
p
n x .05 .10 .15 .20 .25 .30 .35 .40 .45 .50
3 0 .8574 .7290 .6141 .5120 .4219 .3430 .2746 .2160 .1664 .1250
1 .1354 .2430 .3251 .3840 .4219 .4410 .4436 .4320 .4084 .3750
2 .0071 .0270 .0574 .0960 .1406 .1890 .2389 .2880 .3341 .3750
3 .0001 .0010 .0034 .0080 .0156 .0270 .0429 .0640 .0911 .1250
Slide 98
Expected Value
E(x) = = np
Variance
Var(x) = 2 = np(1 - p)
Standard Deviation
np(1 - p )
Slide 99
Example: Evans Electronics
Expected Value
E(x) = np = 3(.1) = .3 employees out of 3
Variance
Var(x) = np(1 p) = 3(.1)(.9) = .27
Standard Deviation
3(.1)(.9) .52 employees
Slide 100
A Poisson distributed random variable is often
useful in estimating the number of occurrences
over a specified interval of time or space
It is a discrete random variable that may assume

an infinite sequence of values (x = 0, 1, 2, . . . ).
Slide 101
Examples of Poisson distributed random variables:
the number of knotholes in 14 linear feet of

pine board
the number of vehicles arriving at a toll

booth in one hour
Bell Labs used the Poisson distribution to model

the arrival of phone calls.
Slide 102
1. The probability of an occurrence is the same
for any two intervals of equal length.
2. The occurrence or nonoccurrence in any

interval is independent of the occurrence or
nonoccurrence in any other interval.
Slide 103
x e-
f ( x)
x!
where:
x = the number of occurrences in an interval
f(x) = the probability of x occurrences in an interval
= mean number of occurrences in an interval
e = 2.71828
x! = x(x 1)(x 2) . . . (2)(1)
Slide 104
Since there is no stated upper limit for the number
of occurrences, the probability function f(x) is
applicable for values x = 0, 1, 2, without limit.
In practical applications, x will eventually become

large enough so that f(x) is approximately zero
and the probability of any larger values of x
becomes negligible.
Slide 105
Slide 106
Using the
probability
= 6/hour = 3/half-hour, x = 4 function
3 4 (2.71828)-3
f (4) .1680
4!
Slide 107
Poisson Probabilities
0.25
0.20
Probability
Actually,
0.15
the sequence
0.10 continues:
11, 12, 13
0.05
0.00
0 1 2 3 4 5 6 7 8 9 10
Number
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Slide 108
A property of the Poisson distribution is that
the mean and variance are equal.
= 2
Slide 109
=2=3
Slide 110
The hypergeometric distribution is closely related
to the binomial distribution.
However, for the hypergeometric distribution:
the trials are not independent, and
the probability of success changes from trial

to trial.
Slide 111
r N - r

x n - x
f ( x)
N

n
where: x = number of successes
n = number of trials
f(x) = probability of x successes in n trials
N = number of elements in the population
r = number of elements in the population
labeled success
Slide 112
r N -r
x n-x

f (x) for 0 < x < r
N
n number of ways
n x failures can be selected
number of ways from a total of N r failures
x successes can be selected in the population
from a total of r successes
in the population number of ways
n elements can be selected
2015 Cengage Learning. All Rights Reserved. May notfrom a population
be scanned, copied of size N
Slide 113
The probability function f(x) on the previous slide
is usually applicable for values of x = 0, 1, 2, n.
However, only values of x where: 1) x < r and

2) n x < N r are valid.
If these two conditions do not hold for a value of

x, the corresponding f(x) equals 0.
Slide 114
Slide 115
Using the
probability
function
r N - r 2 2 2! 2!
1
x n - x 2 0 2!0! 0!2!
f ( x ) .167
N 4 4! 6

n
2
2!2!
Slide 116
Mean
r
E ( x) n
N
Variance
r r N - n
Var ( x) n 1 -
2

N N N - 1
Slide 117
Mean
r 2
n 2 1
N 4
Variance
2 2 4 - 2 1
2 1 -
2
.333
4 4 4 - 1 3
Slide 118
Consider a hypergeometric distribution with n trials
and let p = (r/n) denote the probability of a success
on the first trial.
If the population size is large, the term

(N n)/(N 1) approaches 1.
The expected value and variance can be written

E(x) = np and Var(x) = np(1 p).
Note that these are the expressions for the expected

value and variance of a binomial distribution.
continued
Slide 119
When the population size is large, a hypergeometric
distribution can be approximated by a binomial
distribution with n trials and a probability of
success p = (r/N).
Slide 120

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What are the chances that sales will decrease

What is the likelihood a new assembly method

What are the odds that a new investment will

Probability values are always assigned on a scale

A probability near zero indicates an event is quite

A probability near one indicates an event is almost

The event The occurrence The event

In statistical experiments, probability determines

Even though the experiment is repeated in exactly

For this reason, statistical experiments are some-

The sample space for an experiment is the set of

An experimental outcome is also called a sample

Lose 2 (5, -2) Gain $3,000

0 < P(Ei) < 1 for all i

P(E1) + P(E2) + . . . + P(En) = 1

Relative Frequency Method

The probability of any event is equal to the sum of

If we can identify all the sample points of an

Union of Two Events

Intersection of Two Events

Mutually Exclusive Events

The complement of A is denoted by Ac.

The union of events A and B is denoted by A B

The intersection of events A and B is denoted by A

The law is written as:

P(A B) = P(A) + P(B) - P(A B

Two events are mutually exclusive if, when one event

The addition law for mutually exclusive events is:

P(A B) = P(A) + P(B)

The conditional probability of A given B is denoted

A conditional probability is computed as follows :

The law is written as:

Profitable (M) .36 .34 .70

Total .48 .52 1.00

Two events A and B are independent if:

P(A|B) = P(A) or P(B|A) = P(B)

The law is written as:

Two events with nonzero probabilities cannot be

If one mutually exclusive event is known to occur,

Two events that are not mutually exclusive, might

P(A1) = .7, P(A2) = .3

A discrete random variable may assume either a

A continuous random variable may assume any

Family x = Number of dependents Discrete

We can describe a discrete probability distribution

First type: uses the rules of assigning probabilities

Second type: uses a special mathematical formula

The required conditions for a discrete probability

The use of the relative frequency method to develop

Several discrete probability distributions specified

The discrete uniform probability function is

f(x) = 1/n the values of the

The expected value is a weighted average of the

The expected value does not have to be a value the

The variance is a weighted average of the squared

The standard deviation, , is defined as the

Each outcome of a bivariate experiment consists of

When dealing with bivariate probability distributions,

1 0.29 0.29 -0.93 0.8649 0.250821

2 0.49 0.98 0.07 0.0049 0.002401

3 0.22 0.66 1.07 1.1449 0.251878