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Probability Distribution2

The document discusses probability distributions and random variables. It defines a probability distribution as listing possible outcomes of a random variable along with their probabilities. A random variable is a variable that can take different values from random outcomes. Probability distributions can be discrete, allowing only certain values, or continuous, allowing any value within a range. The expected value of a random variable is the sum of each outcome value multiplied by its probability. Common probability distributions include binomial, Poisson, normal, and uniform.

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71 views11 pages

Probability Distribution2

The document discusses probability distributions and random variables. It defines a probability distribution as listing possible outcomes of a random variable along with their probabilities. A random variable is a variable that can take different values from random outcomes. Probability distributions can be discrete, allowing only certain values, or continuous, allowing any value within a range. The expected value of a random variable is the sum of each outcome value multiplied by its probability. Common probability distributions include binomial, Poisson, normal, and uniform.

Uploaded by

pranay
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Probability Distribution

Meaning and Example


• The list of all possible outcomes of a random variable along
with their probabilities of occurrence is called probability
distribution.

Possible Outcomes from Two Tosses of a Fair Coin


First Toss Second Toss Number of Probabilities of the four
Tails Possible Outcomes
T T 2 0.5×0.5= 0.25

T H 1 0.5×0.5= 0.25

H T 1 0.5×0.5= 0.25

H H 0 0.5×0.5= 0.25
Frequency Distribution vs Probability Distribution

• Frequency distribution is a listing of the observed frequencies


of all the outcomes of an experiment when the experiment was
done,

• whereas a probability distribution is a listing of the


probabilities of all the possible outcomes that could result if
the experiment was done
Random Variables
• A variable is random if it takes on different values as a result
of the outcomes of a random experiment.

Discrete:
If a random variable is allowed to take only a
limited number of values, which can be listed, it
is a discrete random variable
Random
Variable
Continuous:
If a random variable take any value within a
given range, it is a continuous random variable.
Expected Value of a Random Variable
• To obtain the expected value of a discrete random variable, we
multiply each value that the random variable can assume by
the probability of occurrence of that value and then sum these
products
• Example:
Outcome Frequency Outcome Frequency Probability O×P
102 10 102 10 0.08 8.16
105 20 105 20 0.16 16.8
108 45 108 45 0.36 38.88
111 15 111 15 0.12 13.32
114 20 114 20 0.16 18.24
117 15 117 15 0.12 14.04
Expected 109.44
Outcome
Use of Expected Value in Decision Making

• The following data provides sales of a fruits seller for last 100
days on strawberries.

Daily Sales Number of Days Sold Probability of each


Number being sold
10 15 0.15
11 20 0.20
12 40 0.40
13 25 0.25
Combining Probabilities and Monetary Values

• This product has a very limited useful. If not sold on the day of
the day of delivery, it is worthless.
• One pack of strawberries costs $20, and the wholesaler recives
$50 per day.
Types of Probability Distribution
• Discrete Probability Distribution: A discrete probability can
take on only a limited number of values, which can be listed
• Binomial Probability Distribution
• Poisson Probability Distribution
• Negative binomial Probability Distribution
• Hyper-Geomotric probability Distribution
• Continuous Probability Distribution: In a continuous
probability distribution the variable under consideration is
allowed to take on any value within a given range.

• Normal Probability Distributions


• Uniform Probability Distributions
Binomial Distribution
• Binomial probability distribution is a widely used probability
distribution for a discrete random variable.
• Binomial Distribution is associated with the name of a Swiss
Mathematician James Bernoulli who discovered it in 1700 and
was published first in 1713.
• This process can be described as follows:
• Each trial has only two possible outcome: heads or tails, yes or
no, success or failure
• The trials are statistically independent; that is, the outcome of
one toss does not affect the outcome of other
Binomial Formula

• Where
• p= Probability of success = 0.5
• q=(1-p)= the probability of failure=0.5
• r= number of successes desired
• n= number of trials undertaken

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