Sum Rule: If the two sets of possible outcomes are disjoint, then the number of possible outcomes for

the event is m + n

A scholarship is available, and the professor to receive this scholarship must be chosen from the Accountancy, Business
Administration or Tourism Department. How many different choices are there for this scholarship if there are 15 qualified
professors from the Accountancy Department, 50 qualified professors from the Business Administration Department and 26
qualified professors from the Tourism Department?

15 + 50 + 26 = 91 possible choices to award the scholarship

Multiplication Rule: In a sequence of n events in which the 1st has n1 possibilities and the 2nd event has n2, and the 3rd has
n3, and so forth, the total number of possibilities of the sequence will be No. of ways = n1(n2)(n3)…(nk)

A student has a choice of 5 sandwiches and 6 juices. In how many ways can he choose 1 sandwich and 1 juice?

How many ways can 8 persons be seated on a chair if there are only 4 chairs available?

Solution: The first chair can be occupied by any of the 8 persons; anyone of the remaining 7 persons can occupy the second
chair; the third chair can be occupied by one of the remaining 6 persons; and finally, the fourth chair can be occupied by one of
the remaining 5 persons. Therefore, the number of ways can be calculated, as follows:

Number of ways = n1 x n2 x n3 x n4 = 8 x 7 x 6 x 5 = 1,680 ways

Factorial Notation:

n! (which read “n factorial”) is the product of the first n consecutive natural numbers. 0! is defined to be 1

n! = n(n – 1)(n – 2)(n – 3)…(3)(2)(1)

Permutation:

A permutation is an arrangement of all or part of a number of things (or objects) in a definite order. The number of permutations
of n objects taken r at a time is given by

P (n,r) = nPr = n!/(n-r)!, 0 less than equal to r less than equal to n.

n- population

r- sample
Circular Permutations:

When things are arranged in places along a closed curve or a circle, in which any place may be regarded as the first or last
place, they form a circular permutation. Thus, with n distinguishable objects we have (n – 1)! arrangements. In symbol,

Pc = (n – 1)!

In how many ways can 4 students be seated at a round table?

Pc = (n – 1)! = (4 – 1)! = 3! = 6 There are 6 ways of arranging 4 persons in a circular table.

How many ways can 6 ladies be seated in a circular table such that 2 of the ladies must always sit beside each other?

Consider the 2 ladies as one fixed object. Hence, these 2 ladies taken as one, can be arranged in 2 ways.

Thus, (n-1)! nPr = (5 – 1)! 2P2 = 24(2) = 48

Permutations with repeated elements:

It often happens that objects which are virtually identical get arranged. Our inability to distinguish between these items reduces
the number of possible permutations by the number of ways these identical items themselves can be arranged.

Combination of different things:

Combinations of different things taken any number at a time. The total number of combinations Cn of n different things taken 1, 2,
3, …, n at a time is

Cn = 2^n – 1
Sample Spaces:

An outcome is the result of a single trial of a probability experiment. A sample space is the set of all possible outcomes of a
probability experiment.

Simple and Compound Events:

An event is a collection of one or more outcomes of an experiment.

A simple event is an event that includes one and only one of the outcomes for an experiment and is denoted by E. (also called as
elementary event).

A compound event is a collection of more than one outcome for an experiment (also called composite event).

Probability:

It is a numerical measure of the likelihood that a specific event will occur.

An impossible event is when an event cannot occur has zero probability.

A sure event is when an event is certain to occur has a probability equal to 1.

Complementary Events:

The complement of an event E is the set of outcomes in the sample space that are not included in the outcome of event E. The
complement of E is denoted by E’ (read as E prime).

P(E’) = 1 – P(E)

P(E) = 1 – P(E’)

P(E) + P(E’) = 1

3 Conceptual approaches to Probability:

1.​ Classical probability

2.​ Empirical probability
3.​ Subjective probability

Classical Probability:

P(E) = n(E) divided by n(S)

A card is drawn from an ordinary deck of card. Find these probabilities

a. of getting king of hearts,

1/52 = 52

b. of getting a spade,

13/52 = 1/4

c. of getting a 5 or a clubs,

4 + 13 - 1/52 = 16/52 = 4/13

d. of getting a 5 or a 7

4+4/52 = 8/52 = 2/13

e. of getting a card which is not a spade,

13+13+13/52 = 39/52

f. of getting 11 of clubs.

= 0 (IMPOSSIBLE EVENT

Empirical Probability:

It is the type of probability that uses frequency distribution based on observations to determine numerical probabilities of events.

P(E) = f/n

F- frequency for the class

N - total frequencies of the distribution

In a sample of 50 college students, 18 are freshmen, 23 are sophomore, 2 are junior, and 7 are senior. Set up a frequency
distribution and find the following probabilities:

a. a student is a freshman.

18/50 = 9/25

b. a student is a freshman or a sophomore.

18+23/50 = 41/50

c. a student is neither a freshman nor a junior.

23+7/50 = 3/5

d. a student is not a senior

Subjective Probability:

It is when the probability assigned to an event based on subjective judgment, experience, information, and belief

Additive Rule:

A card is drawn from an ordinary deck of card. Find these probabilities

a. drawing a red card or a face card,

b. drawing an ace card or a face card,

c. drawing a heart card or a black card or the ace of diamond

Conditional Probability:

The probability of an event is occurring when it is known that some event has occurred is called a conditional probability.

A single fair die is rolled once. Let B denote that the number obtained is less than 4; let A denote the event that an odd number is
rolled. Compute P(B/A).
A box contains white and red balls. Each ball is labeled either A or B. The composition of the box is shown below.

In getting one ball from the box, what is the probability the a white ball is taken given that is it labeled A.

Multiplication Rule:

The probability is determined with replacement, where the happening of the second event is not affected by the happening of first
event. This condition demonstrates the independent type of event.

If A and B are independent events, then, P(A ∩ B) = P(A) ∗ P(B)

The probability is determined without replacement where the occurrence of second event is affected by the occurrence first
event. This condition demonstrates the dependent type of event. P(A ∩ B) = P(A) ∗ P (B⁄A)

A box contains 5 green, 6 yellow and 4 blue balls. Find the probability of selecting two balls (a yellow on the first and a blue on
the second) if selection is done.

a. with replacement

b. without replacement
Probability Distribution:

A probability distribution describes how the values of a random variable are distributed. It provides a function that shows the
possible values for a variable and how often they occur.

Random Variable:

A random variable is a variable whose possible values are numerical outcomes of a random phenomenon. Random variables are
fundamental in probability theory and statistics because they allow us to quantify and analyze random events

We shall use a capital letter, say X, to denote a random variable and its corresponding small letter, x, for one of its values.

2 main types:

1.​ Discrete Probability Distribution - Assigns probabilities to distinct values.

2.​ Continuous Probability Distribution - Assigns probabilities to intervals of values rather than distinct
points.

Two balls are drawn in succession without replacement from a box containing 4 red balls and 3 black balls. The
possible outcomes and the values y of the random variable Y, where Y is the number of red balls, are

Discrete random variable:

If a sample space contains a finite number of possibilities or an unending sequence with as many elements s there are whole
numbers, it is called a discrete sample space

A random variable defined over a discrete sample space is called a discrete random variable.

Discrete random variable with a finite number of values:

Let x = number of TV sets sold in one day where x can take on 5 values (0, 1, 2, 3, 4)

Discrete random variable with an infinite sequence of values:

Let x = number of customers arriving in one day where x can take on the values 0, 1, 2, . . . We can count the customers arriving,
but there is no finite upper limit on the number that might arrive.

Continuous random variable:

If the sample space contains an infinite number of possibilities equal to the number of points on a line number, it is called a
continuous sample space.

The outcome of some statistical experiment may be neither finite nor countable.

A variables that represent measured data, such as all possible heights, weights, temperatures, distances or life period.

A random variable that may take on any value in an interval or collection of interval
Discrete probability distribution:

A table or a formula listing all possible values that a discrete random variable can take on, along with the associated probabilities,
is called a discrete probability distribution.

The probability function, denoted by f(x), provides the probability that the random variable X takes on a specific value. P(X = x) =
f(x)

A discrete probability distribution must satisfy these two conditions:

f(x) ≥ 0 or P(x) ≥ 0

∑ f(x) = 1.0 or ∑ P(x) = 1.0

Example:

Find the probability distribution of the sum of numbers when a pair of dice is tossed.

Find the formula for the probability distribution of the number of heads when a coin is tossed 4 times.
A mutual fund salesperson has arranged to call on three people tomorrow. Based on past experience, the salesperson knows
there is a 20% chance of closing a sale on each call. Determine the probability distribution of the number of sales the
salesperson will make.
Expected value and variance:

The expected value, or mean, of a random variable is a measure of its central location.

Expected value of a discrete random variable: E (x ) = 𝝁 =σ x f(x)

The variance summarizes the variability in the values of a random variable.

Variance of a discrete random variable:

Var(x ) = 𝝈 2 = σ 𝒙 − 𝝁 𝟐𝒇 𝒙

The standard deviation, 𝝈, is defined as the positive square root of the variance

Example:

Find the expected number of boys on a committee of 3 selected at random from 4 boys and 3 girls.
Type of Discrete Probability Distributions

• Discrete Uniform Distribution

• The Binomial Probability Distribution

• The Poisson Probability Distribution

Discrete uniform distribution:

If the random variable X assumes the values x1 , x2 , …, xk , with equal probabilities, then the discrete uniform distribution is
given by f(x; k) = 𝟏 𝒌 for x = x1 , x2 , …, xk k is the number of values of X.

Example: Rolling a die, f(x; 6)= 𝟏/6

Binomial probability distribution:

Properties of a Binomial Experiment

• The experiment consists of a sequence of n identical trials.

• Two outcomes, success and failure, are possible on each trial.

• The probability of a success, denoted by p, does not change from trial to trial.

• The trials are independent.

Toss a coin: Define tail as success and head as failure f(S) = .5 f(F) = .5

Roll a die: Define 1 as success, any other number as failure f(S) = 1/6 f(F)= ⅚

Binomial distribution:

If a binomial trial can result in a success with probability p and a failure q = 1 - p, then the probability distribution
of a random variable X, the number of successes in n independent trials is
Poisson distribution:

The probability distribution of a Poisson random variable X, representing the number of outcomes occurring in a given time
interval or specific region, is:

where μis the average number of outcomes occurring in the given time interval or specified region, and e=2.71828...e =
2.71828...e=2.71828....
The average number of field mice per acre in a 5-acre wheat field is estimated to be 10. Find the probability that a given acre
contains more than 15 mice.

Poisson approximation of binomial distribution:

The Poisson probability distribution can be used as an approximation of the binomial probability distribution when p, the
probability of success, is small and n, the number of trials, is large.

Approximation is good when p < .05 and n > 20

Set 𝝁 = np and use the Poisson tables.

Continuous probability distribution:

The function with values f(x) is called a probability density function for the continuous random variable X if the total area under its
curve and above the-axis is equal to 1 and if the area under the curve between any two ordinates x = a and x = b gives the
probability that X lies between a and b.

-​ A continuous random variable can assume any value in an interval on the real line or in a collection of intervals.
-​ It is not possible to talk about the probability of the random variable assuming a particular value.
-​ Instead, we talk about the probability of the random variable assuming a value within a given interval.

The probability of the continuous random variable assuming a specific value is 0.

The probability of the random variable assuming a value within some given interval from x1 to x2 is defined to be the area under
the graph of the probability density function between x1 and x2 .
Uniform probability distribution:

where

a = smallest value the variable can assume

b = largest value the variable can assume

The probability of the continuous random variable assuming a specific value is 0. P(x=x1 ) = 0

Example:

Slater customers are charged for the amount of salad they take. Sampling suggests that the amount of salad taken is uniformly
distributed between 5 ounces and 15 ounces.
What is the probability that a customer will take between 12 and 15 ounces of salad?
3. Normal Probability Distribution
The normal distribution (also called the bell curve) is the most important continuous probability distribution. It is
used for natural phenomena, such as:

●​ Heights of people
●​ IQ scores
●​ Exam scores
●​ Production errors in factories

📌 Probability Density Function (PDF) for Normal Distribution

where:

●​ μ= mean (average)
●​ σ\sigmaσ = standard deviation
●​ eee is approximately 2.718.

📌 Properties of the Normal Distribution

✅ 1. Symmetric around the mean (μ\muμ).​
✅ 2. The total area under the curve is 1.​
✅ 3. 68-95-99.7 Rule (Empirical Rule):

📌 Standard Normal Distribution (Z-Scores)

A standard normal distribution is a special case of the normal distribution where:

●​ μ=0
●​ σ=1

We use Z-scores to convert any normal distribution into a standard normal distribution.
📌 Formula for Z-Score

where:

●​ x = observed value
●​ Μ = mean
●​ σ = standard deviation

📝 Example: Comparing Exam Scores

Joseph took two exams:

●​ Mathematics:μ=82, σ=8, Joseph’s score x=88.

●​ English: μ=86, σ=10, Joseph’s score x=92.

Q: In which subject did Joseph perform better?

1.​ Compute Z-score for Mathematics:​

2.​ Compute Z-score for English:

✅ Answer: Joseph performed better in Mathematics since his Z-score is higher (0.75 vs. 0.6).

📌 4. Normal Approximation to Binomial Distribution

●​ If a binomial random variable has a large sample size (nnn), its distribution can be approximated
using a normal distribution.
●​ Conditions:
📌 Mean and Standard Deviation
●​ Mean: μ=np
●​ Standard deviation:

📝 Example: Recovery Rate

●​ A disease has a recovery probability of 0.6.
●​ 100 patients are affected.
●​ Find the probability that less than 50 recover.

Step 1: Find μ\muμ and σ\sigmaσ

Step 2: Convert to Z-score

✅ Answer: Use Z-table to find probability for Z=−2.04Z = -2.04Z=−2.04, which gives 0.0207 (or 2.07%).

📌 5. Exponential Probability Distribution

●​ Used to model the time between events, such as:
○​ Time between customer arrivals
○​ Time before a machine breaks down

📌 Probability Density Function (PDF)

 where:

●​ μ = mean (average waiting time)

📝 Example: Car Wash Arrivals

●​ A car wash has an average arrival time of 3 minutes.
●​ Find the probability that the next customer arrives within 2 minutes.

Using the formula:

✅ Answer: 48.66% probability.

 📖 DETAILED REVIEWER: HYPOTHESIS TESTING & CORRELATION REGRESSION

📌 1. Hypothesis Testing
Hypothesis Testing is a statistical method used to make decisions about a population based on sample data. It
helps determine whether there is enough evidence to support a claim about a population parameter.

📌 Key Concepts
●​ Null Hypothesis (H₀): Assumes no significant difference or effect.
●​ Alternative Hypothesis (H₁ or Hₐ): Assumes a significant difference or effect.
●​ Level of Significance (α): The probability of rejecting a true H₀. Common values are 0.05 (5%) and
0.01 (1%).
●​ Type I Error: Rejecting a true H₀.
●​ Type II Error: Failing to reject a false H₀.

📌 2. Types of Hypothesis Tests

One-Tailed vs. Two-Tailed Tests
●​ One-tailed test: Tests if a value is greater than or less than a threshold.
●​ Two-tailed test: Tests if a value is different from a thresholds
📌 3. One-Sample Z-Test

📝 Example: College Dean Salary

A sample of 35 college deans has a mean salary of ₱65,700. The population standard deviation is ₱5,250. Test
the claim that college deans earn more than ₱63,000 at α = 0.01.

✅ Step 1: Hypotheses
●​ H₀: μ ≤ 63,000
●​ H₁: μ > 63,000

✅ Step 2: Compute Z-score

✅ Step 3: Compare with Critical Value Since Z=3.043>2.33Z = 3.043 > 2.33 (critical value), reject H₀.
✅ Conclusion: There is enough evidence to support the claim.

📌 4. One-Sample t-Test
📝 Example: Civil Engineer Salary
A sample of 19 civil engineers has a mean salary of ₱17,350 and standard deviation of ₱1,230. Test the claim
that the average salary is ₱18,000 at α = 0.01.

✅ Step 1: Hypotheses
●​ H₀: μ = 18,000
●​ H₁: μ ≠ 18,000

✅ Step 2: Compute t-score

✅ Step 3: Compare with Critical Value Since ∣t∣=2.303<2.878|t| = 2.303 < 2.878, fail to reject H₀.
✅ Conclusion: Not enough evidence to reject the claim.

📌 5. Correlation & Regression

📌 Correlation
Measures the strength and direction of a relationship between two variables.

📌 Pearson's Correlation Coefficient ®

✅ r>0r > 0 → Positive correlation​

✅ r<0r < 0 → Negative correlation
✅ r=0→ No correlation

​
📌 6. Simple Linear Regression
Regression predicts a dependent variable YY based on an independent variable XX.

📌 Regression Equation

✅ Example: Predict sales based on temperature using regression.

📌 Summary of Tests