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| 13 Theory slides |
| 8 Exercises - Grade E - A |
| Each lesson is meant to take 1-2 classroom sessions |
Here are a few recommended readings before getting started with this lesson.
Understanding Probability
Understanding Descriptive Measures
Understanding Types of Data
Other Recommended Readings
A random variable assigns a numerical value to an outcome of a probability experiment. In many situations, it is important to know how likely it is that a random variable will take a specific value. This can be represented by listing or graphing the probability of each value of a random variable. This is called a probability distribution.
A probability distribution of a random variable X is a function that gives the probability of each outcome in the sample space. It can be represented by tables, equations, or graphs. A probability distribution needs to satisfy two conditions to be valid.
Consider the roll of a pair of standard dice. Let X be the random variable that represents the sum of the two dice. By the fundamental counting principle, since rolling each die has 6 possible outcomes, there are a total of 6* 6 = 36 possible results. Additionally, the possible values of X are integers from 2 to 12.
A table that represents the theoretical probability distribution of X will now be created. Frequencies represent the number of dice roll results that add up to the given values x of the random variable X. The frequency is divided by 36 to determine the theoretical probability of each outcome.
X=Sum of Two Dice | ||
---|---|---|
x | Frequency | P(X=x) |
2 | 1 | 1/36≈ 0.028 |
3 | 2 | 2/36≈ 0.056 |
4 | 3 | 3/36≈0.083 |
5 | 4 | 4/36≈0.111 |
6 | 5 | 5/36≈0.139 |
7 | 6 | 6/36≈0.167 |
8 | 5 | 5/36≈0.139 |
9 | 4 | 4/36≈0.111 |
10 | 3 | 3/36≈0.083 |
11 | 2 | 2/36≈ 0.056 |
12 | 1 | 1/36≈ 0.028 |
Izabella is a big soccer fan. One weekend, she invited her friend Dylan to watch a world championship match together at her house. During the coin toss ceremony, Izabella asked Dylan about the number of heads they will obtain if they toss a fair coin four times.
Let X be a random variable that represents the number of heads in four coin flips. Help Izabella and Dylan solve the following problems and determine whether they can predict the number of times the experiment results in heads.
Number of Heads, x | Tally | Frequency |
---|---|---|
0 | |||| | | 6 |
1 | |||| |||| |||| |||| || | 22 |
2 | |||| |||| |||| |||| |||| |||| |||| || | 37 |
3 | |||| |||| |||| |||| |||| ||| | 28 |
4 | |||| || | 7 |
Use this data to find the experimental probability of each possible value of X.
X=Number of Heads | |||||
---|---|---|---|---|---|
x | 0 | 1 | 2 | 3 | 4 |
P(X=x) | 0.0625 | 0.25 | 0.375 | 0.25 | 0.0625 |
X=Number of Heads | |||||
---|---|---|---|---|---|
x | 0 | 1 | 2 | 3 | 4 |
P(X=x) | 0.06 | 0.22 | 0.37 | 0.28 | 0.07 |
X=Number of Heads | |||||
---|---|---|---|---|---|
x | 0 | 1 | 2 | 3 | 4 |
Possible Outcomes | T T T T | T T T H, T T H T, T H T T, H T T T | H H T T, H T T H, T T H H, H T H T, T H T H, T H H T | H H H T, H H T H, H T H H, T H H H | H H H H |
Frequency | 1 | 4 | 6 | 4 | 1 |
Before calculating the theoretical probability of each value, find the total number of possible outcomes. Total: 1+4+6+4+1= 16 Now divide the frequency of each outcome by the total number of possibilities to calculate the probability P(X=x) that the random variable X takes the specific value x.
X=Number of Heads | |||||
---|---|---|---|---|---|
x | 0 | 1 | 2 | 3 | 4 |
Frequency | 1 | 4 | 6 | 4 | 1 |
P(X=x) | 1/16 | 4/16=1/4 | 6/16=3/8 | 4/16=1/4 | 1/16 |
This table describes the theoretical probabilities associated with tossing a fair coin four times. Since only the theoretical probability is required, the Frequency
column can be skipped.
X=Number of Heads | |||||
---|---|---|---|---|---|
x | 0 | 1 | 2 | 3 | 4 |
P(X=x) | 0.0625 | 0.25 | 0.375 | 0.25 | 0.0625 |
Number of Heads, x | Tally | Frequency |
---|---|---|
0 | |||| | | 6 |
1 | |||| |||| |||| |||| || | 22 |
2 | |||| |||| |||| |||| |||| |||| |||| || | 37 |
3 | |||| |||| |||| |||| |||| ||| | 28 |
4 | |||| || | 7 |
Calculate the experimental probability of each possible outcome by dividing its frequency by the total number of trials, 100.
Number of Heads, x | Tally | Frequency | P(X=x) |
---|---|---|---|
0 | |||| | | 6 | 6/100 |
1 | |||| |||| |||| |||| || | 22 | 22/100 |
2 | |||| |||| |||| |||| |||| |||| |||| || | 37 | 37/100 |
3 | |||| |||| |||| |||| |||| ||| | 28 | 28/100 |
4 | |||| || | 7 | 7/100 |
Since only the experimental probability is required, the Tally
and Frequency
columns can be skipped. Next, write the table horizontally.
X=Number of Heads | |||||
---|---|---|---|---|---|
x | 0 | 1 | 2 | 3 | 4 |
P(X=x) | 0.06 | 0.22 | 0.37 | 0.28 | 0.07 |
The expected value of a random variable X is the average of the possible outcomes of a random variable. It is used to describe the center of a probability distribution. For a discrete random variable, the expected value E(X) is given by the weighted mean.
E(X) = ∑ _(i=1)^n x_i * P(X=x_i)
In this formula, x_i represents a specific outcome, P(X=x_i) corresponds to the associated probability of x_i, and n is the number of all possible outcomes. According to the law of large numbers, when considering a sequence of random variables, its average tends to the expected value under specific conditions.
Let X_1, X_2, ..., X_n be independent random variables with an identical probability distribution and S_n be the mean of the random variables. S_n=X_1+X_2+...+X_n/n The independence of random variables means that the events that different random variables take particular values are independent. If E(X_i)=μ represents the expected value of X_i, the law of large numbers states that S_n tends towards μ.
lim _(n → +∞) S_n=μ
The expected value is commonly used with a measure of variation such as the variance or standard deviation to determine how outcome will differ from the expected value.
The variance of a random variable describes how far from the expected value E(X) the outcomes of a random variable X are likely to be. To calculate the variance, begin by determining the deviation of each possible outcome x_i — the difference between x_i and E(X). Deviation ofx_i x_i-E(X) The variance is the total sum of the products of the deviation of each outcome and its corresponding probability P(X=x_i).
σ^2=Σ[[x_i-E(X)]^2* P(X=x_i)]
The standard deviation of a random variable is a measure of variation that describes how spread out the outcomes of a random variable X are from its expected value E(X). The standard deviation is represented by the Greek letter σ — read as sigma
— and is given by the square root of the variance of X.
σ=sqrt(Σ[[x_i-E(X)]^2* P(X=x_i)])
In this formula, x_i is a specific outcome and P(X=x_i) is the probability of x_i.
Let X be the random variable representing the number of cars sold on a given day in a car dealership. The table below shows the probability distribution of X.
x | 0 | 1 | 2 | 3 | 4 |
---|---|---|---|---|---|
P(X=x) | 1/15 | 3/15 | 6/15 | 3/15 | 2/15 |
Substitute values
a*b/c= a* b/c
0/a=0
Identity Property of Addition
Add fractions
Use a calculator
Round to 2 decimal place(s)
x_i | [x_i-E(X)]^2 | [x_i-E(X)]^2* P(X=x_i) |
---|---|---|
0 | ( 0- 2.13)^2=4.5369 | 4.5364* 1/15≈ 0.3025 |
1 | ( 1- 2.13)^2=1.2769 | 1.2769* 3/15≈ 0.2554 |
2 | ( 2- 2.13)^2=0.0169 | 0.0169* 6/15≈ 0.0068 |
3 | ( 3- 2.13)^2=0.7569 | 0.7569* 3/15≈ 0.1514 |
4 | ( 4- 2.13)^2=3.4969 | 3.4969* 2/15≈ 0.4663 |
Variance σ^2 | ≈ 1.1824 |
Finally, calculate the square root of the variance to get the standard deviation of X.
Standard Deviation: sqrt(1.1824)≈ 1.09Izabella's aunt Magdalena owns a clothing store. She needs to increase stock in her shop and plans to invest $15 000 in one of the two collections that were offered to her by well-known brands. Each brand claims that they have a great expected rate of return. Their probability distributions are described below.
Dylan and Izabella want to help Magdalena make the best decision. They decided to use their recently acquired knowledge about the expected value and standard deviation of a probability distribution to analyze the offers. Help them answer the following questions and give the best advice to Magdalena.
Substitute values
Multiply
Add and subtract terms
x_i | [x_i-E(X)]^2 | [x_i-E(X)]^2* P(X=x_i) |
---|---|---|
1200 | ( 1200- 1125)^2=5625 | 5625* 0.5= 2812.5 |
1800 | ( 1800- 1125)^2=455 625 | 455 625* 0.2= 91 125 |
900 | ( 900- 1125)^2=50 625 | 50 625* 0.2= 10 125 |
-150 | ( -150- 1125)^2=1 625 625 | 1 625 625* 0.1= 162 562.5 |
Sum of Values | 266 625 |
The sum of the values of the last column represents the variance of the probability distribution. The standard deviation will be found by taking the square root of 266 625. Standard Deviation: sqrt(266 625)≈ 516.36
Substitute values
Multiply
Add and subtract terms
x_i | [x_i-E(X)]^2 | [x_i-E(X)]^2* P(X=x_i) |
---|---|---|
3600 | ( 3600- 1145)^2=6 027 025 | 6 027 025* 0.3= 1 808 107.5 |
2850 | ( 2850- 1145)^2=2 907 025 | 2 907 025* 0.1= 290 702.5 |
-300 | ( -300- 1145)^2=2 088 025 | 2 088 025* 0.4= 835 210 |
-500 | ( -500- 1145)^2=2 706 025 | 2 706 025* 0.2= 541 205 |
Sum of Values | 3 475 225 |
The square root of the variance will be calculated to find the standard deviation of the probability distribution of Collection II. Standard Deviation: sqrt(3 475 225)≈ 1864.20
The expected value and the standard distribution of each probability distribution have been calculated. The following table summarizes these measures.
Measures of the Probability Distributions | ||
---|---|---|
Expected Value of Collection I | 1125 | |
Expected Value of Collection II | 1145 | |
Standard Deviation of Collection I | ≈ 516.23 | |
Standard Deviation of Collection II | ≈ 1864.20 |
Expected Values Collection I: & E(X)=1125 Collection II: & E(X)=1145 The expected values do not give much information on their own because they are very close. This means that the expected profit of each collection is similar. Next, compare the standard deviations to determine which distribution has more variability. Standard Deviation Collection I: &σ≈ 516.36 Collection II: &σ≈ 1864.20 The standard deviation of Collection II is almost four times the that of Collection I, which implies that the expected value of Collection II will have about four times the variability of Collection I. Since Collection II is riskier, with a high chance for both gains and losses, Izabella and Dylan should advise Magdalena to invest in Collection I.
The outcomes of many experiments can be reduced to two possibilities, success or failure. If two more conditions are satisfied, these experiments can be modeled by a binomial experiment.
A binomial experiment is a probability experiment that has the following three properties.
Note that many probability experiments can be reduced so that they satisfy the conditions of a binomial experiment. In case of rolling a die, there are six possible outcomes. However, they can be divided into two groups — even numbers and odd numbers, for example.
Is there a fixed number of trials for each experiment? How many outcomes are possible? Does the probability of each outcome remain constant for each trial? Are trials independent?
Start by recalling the conditions that a binomial experiment should satisfy.
Analyze each situation one at a time to see if it follows all of the conditions of a binomial experiment.
This situation has eight trials of selecting one scratch-off cards at random.
Each card could win a prize or not, which means there are two possible outcomes for each trial. Moreover, the probability of success, which is winning a prize, is 25 % or 0.25, for every card. P(Success)=0.25 Finally, the trials are independent because scratching one card does not affect the probability that any of the other cards reveals a prize. Therefore, this situation represents a binomial experiment.
Note that height can vary for every people surveyed.
Because there are 100 possible answers, it is likely that more than 2 different outcomes will occur. This means that this situation does not represent a binomial experiment.
This situation has a fixed number of trials because it involves asking 20 people if their blood type is O.
Each trial has only two possible solutions, blood type O or another type. Moreover, the probability of having blood type O in each trial is 0.4, which represents the probability of success. P(Success)=0.4 Finally, because the answer of any person surveyed does not affect the probability that other people have O type blood, each trial is independent. This means that this situation is a binomial experiment.
All four situations have already been analyzed and the results are summarized in the following table.
Experiment | Is It a Binomial Experiment? |
---|---|
The Scratch-off Cards | ✓ |
Heights of 100 People | * |
Rolling a Die | * |
Blood Type O? | ✓ |
Because binomial experiments can simplify many complex situations, it is essential to determine how likely it is to obtain a specific number of successes out of n trials in a given experiment. Also, the expected value, or center of the distribution, will be presented.
The binomial distribution is the probability distribution that describes the number of successes x out of n binomial trials. The trials must satisfy three conditions.
Let X be a random variable representing the total number of successes among n trials. The possible values of X are x=0, 1, 2, ..., n. The binomial probability formula can be used to determine the probability of x successes among n trials P(X=x).
P(X=x)=_nC_xp^xq^(n-x)
In this formula, _nC_x is the binomial coefficient and p and q are the probabilities of success and failure, respectively. Additionally, the expected value of X can be determined by the product of the number of trials n and the probability of success p.
E(X)=np
This means that the expected number of successes in n trials is given by np.
Consider the experiment of drawing 1 card from a standard deck of cards with replacement.
If drawing a diamond is considered a success, let X be the number of diamonds drawn. Since there are 13 diamond cards in a standard deck, the probability of success p in each trial will be 1352= 14. The probability of failure q will be 1- 14= 34. Suppose the experiment is repeated 5 times. Then, the binomial distribution with n= 5 can be determined. P(X= x)= _5C_x( 1/4)^x( 3/4)^(5- x) In this situation, the possible values of x are 0, 1, 2, 3, 4, and 5. The distribution of the random variable X can be obtained by evaluating this formula for each of these values.
x | _5C_x(1/4)^x(3/4)^(5-x) | P(X=x)= _5C_x(1/4)^x(3/4)^(5-x) |
---|---|---|
0 | _5C_0( 1/4)^0( 3/4)^(5- 0)=243/1024 | ≈ 0.237 |
1 | _5C_1( 1/4)^1( 3/4)^(5- 1)=405/1024 | ≈ 0.396 |
2 | _5C_2( 1/4)^2( 3/4)^(5- 2)=270/1024 | ≈ 0.264 |
3 | _5C_3( 1/4)^3( 3/4)^(5- 3)=90/1024 | ≈ 0.088 |
4 | _5C_4( 1/4)^4( 3/4)^(5- 4)=15/1024 | ≈ 0.015 |
5 | _5C_5( 1/4)^5( 3/4)^(5- 5)=1/1024 | ≈ 0.001 |
C(n,k)=n!/k! (n-k)!
Write as a product
Cancel out common factors
Simplify quotient
Rewrite x as (x-1)+1
a^(1+m)=a*a^m
a* b/c=a*b/c
Commutative Property of Multiplication
Factor out np
Rewrite n-x as n-1-(x-1)
Substitute values
C(n,k)=n!/k! (n-k)!
∑ _(y=0)^m _mC_y p^yq^(n-y)= 1
a * 1=a
Let X be the random variable representing the number of successes in n binomial trials. The binomial probability P(X=x) can be calculated by using the following formula.
P(X=x)=_nC_xp^xq^(n-x)
In this formula, P(X=x) is the probability that the random variable X is equal to x, which means that there are exactly x successes. Additionally, p and q are the probabilities of success and failure, respectively, and _nC_x is the binomial coefficient.
This proof will begin by calculating the probability of obtaining a fixed sequence with x successes in n independent trials. The number of all possible sequences with x successes will then be calculated. Finally, joining the first and second parts will give the formula.
Note that there are n independent trials, of which x are successes. This means that the difference between n and x gives the number of failures. rc Number of Succeses:& x Number of Failures:& n- x Furthermore, let p be the probability of success and q be the probability of failure in one individual trial. Therefore, by the Multiplication Rule of Probability and the fact that trials are independent, the probability of x successes is given by multiplying p by itself x times. Probability of xSuccesses: p* p* ... * p_(xtimes)=p^x Similarly, because there are n- x failures, the probability of n- x failures is given by multiplying q by itself n- x times. Probability of n- xFailures: q* q* ... * q_(n- xtimes)=q^(n- x) Therefore, the probability of getting exactly x successes and n- x failures is given by the product of p^x and q^(n- x) p^x q^(n- x) By the Commutative Property of Multiplication, any combination of p and q variables can be rearranged. Therefore, the expression is valid for any fixed sequence of x successes and n- x failures. However, note that this is the probability of only one of the possible sequences.
n= 4, r= 2
Subtract term
Write as a product
Cross out common factors
Cancel out common factors
Multiply
2!=2
Calculate quotient
The probability of obtaining a fixed sequence of x successes out of n trials is given by the product of p to the power of x and q to the power of n- x. p^x q^(n- x) Moreover, there are _nC_x possible sequences with x successes. Therefore, by the Addition Rule of Probability, the probability P(X= x) of getting any of the possible sequences is given by adding the probability of getting one sequence _nC_x times. P(X=x)=p^x q^(n-x)+...+p^x q^(n-x)_(_nC_x times) ⇓ P(X=x)= _nC_x p^x q^(n-x)
Dylan is taking a test that consists of five multiple-choice questions. Each question has five answer choices, only one of which is correct. He did not have time to study, so he decides to guess every answer.
Consider using the Addition Rule of Probability.
To find the probability of guessing at least three answers correctly in a five question multiple-choice test, first, verify if this experiment satisfies the three conditions of a binomial experiment.
Condition | Given Experiment | Is Satisfied? |
---|---|---|
There is a fixed number of independent trials. | There are five trials — five questions. | ✓ |
Each trial has two possible outcomes. | The answer for each question is either correct or incorrect. | ✓ |
The probability of success is constant for each trial. | The probability of guessing the correct answer for each question is 1 5= 0.2, where 5 is the number of options. | ✓ |
x= 3
C(n,k)=n!/k! (n-k)!
Subtract terms
Write as a product
Cancel out common factors
Simplify quotient
1!=1
Multiply
Calculate quotient
Calculate power and product
x | _5C_x(0.2)^x(0.8)^(5-x) | P(X=x)= _5C_x(0.2)^x(0.8)^(5-x) |
---|---|---|
3 | _5C_3( 0.2)^3( 0.8)^(5- 3)=160/3125 | P(X= 3)= 0.0512 |
4 | _5C_4( 0.2)^4( 0.8)^(5- 4)=20/3125 | P(X= 4)= 0.0064 |
5 | _5C_5( 0.2)^5( 0.8)^(5- 5)=1/3125 | P(X= 5)≈ 0.00032 |
Substitute values
Add terms
Convert to percent
Condition | Given Experiment | Is Satisfied? |
---|---|---|
There is a fixed number of independent trials. | There are 10 trials — the 10 customers that will enter the store. | ✓ |
Each trial has two possible outcomes. | Whether a customer makes a purchase or not. | ✓ |
The probability of success is constant for each trial. | There is a 0.35 probability that a customer will make a purchase. | ✓ |
x= 0
C(n,k)=n!/k! (n-k)!
Subtract terms
0!=1
a * 1=a
a/a=1
Calculate power and product
Round to 4 decimal place(s)
x | _(10)C_x(0.35)^x(0.65)^(10-x) | P(X=x)= _(10)C_x(0.35)^x(0.65)^(10-x) |
---|---|---|
0 | _(10)C_0( 0.35)^0( 0.65)^(10- 0) | P(X= 0)≈ 0.01346 |
1 | _(10)C_1( 0.35)^1( 0.65)^(10- 1) | P(X= 1)≈ 0.07249 |
2 | _(10)C_2( 0.35)^2( 0.65)^(10- 2) | P(X= 2)≈ 0.17565 |
3 | _(10)C_3( 0.35)^3( 0.65)^(10- 3) | P(X= 3)≈ 0.25222 |
4 | _(10)C_4( 0.35)^4( 0.65)^(10- 4) | P(X= 4)≈ 0.23767 |
5 | _(10)C_5( 0.35)^5( 0.65)^(10- 5) | P(X= 5)≈ 0.15357 |
6 | _(10)C_6( 0.35)^6( 0.65)^(10- 6) | P(X= 6)≈ 0.06891 |
7 | _(10)C_7( 0.35)^7( 0.65)^(10- 7) | P(X= 7)≈ 0.02120 |
8 | _(10)C_8( 0.35)^8( 0.65)^(10- 8) | P(X= 8)≈ 0.00428 |
9 | _(10)C_9( 0.35)^9( 0.65)^(10- 9) | P(X= 9)≈ 0.00051 |
10 | _(10)C_(10)( 0.35)^(10)( 0.65)^(10- 10) | P(X= 10)≈ 0.00003 |
x= 3
C(n,k)=n!/k! (n-k)!
Subtract terms
a^m*a^n=a^(m+n)
Split into factors
Cancel out common factors
Simplify quotient
Multiply
Calculate quotient
Calculate power and product
Round to 2 decimal place(s)
Expected Value ofX E(X) = np In this case, the number of trials n is 1500 and the probability of success is 0.35. The expected number of customers who will make a purchase next month can be determined with this information. E(X)= 1500* 0.35 ⇕ E(X)=525 Therefore, 525 customers are expected to make a purchase next month.
The binomial distribution is a discrete distribution that helps find the probability of the number of successes in a binomial experiment. In some cases, these calculations may be too complex. In such instances, a continuous distribution called normal distribution might approximate the calculations.
Jordan's father plans to invest $ 25 000. He asks Jordan for advice to decide between on two fund options he found.
We are given the probability distributions of each fund. Let's use them to find the expected value and standard deviation of each fund to match each value with its corresponding description.
The expected value of a discrete random variable is given by the total sum of the products of every possible value x_i and its associated probability P(X=x_i). In this case, X will represent the profit of the first fund. We will write each loss as a negative value.
We can now use the expected value to calculate the standard deviation. Let's recall the formula for the calculation of the standard deviation. σ=sqrt(Σ[[x_i-E(X)]^2* P(X=x_i)]) To apply this formula, we will first calculate the square of the difference between each x_i value and the expected value. Then we will multiply each difference by its corresponding probability. Let's do this in a table.
x_i | [x_i-E(X)]^2 | [x_i-E(X)]^2* P(X=x_i) |
---|---|---|
2500 | ( 2500- 1875)^2=390 625 | 390 625* 0.35= 136 718.80 |
3200 | ( 3200- 1875)^2=1 755 625 | 1 755 625* 0.25= 438 906.25 |
2000 | ( 2000- 1875)^2=15 625 | 15 625* 0.20= 3125.00 |
-1000 | ( -1000- 1875)^2=8 265 625 | 8 265 625* 0.20= 1 653 125 |
Sum of Values | 2 231 875.05 |
The sum of the values of the last column represents the variance of the probability distribution. Since the standard deviation is given by the square root of the variance, we will now calculate the square root of 2 231 875.05. Standard Deviation: sqrt(2 231 875.05)≈ $ 1494
We will now follow a similar procedure to find the expected value and the standard deviation of Fund II.
We will now use a table to calculate the variance of the distribution.
x_i | [x_i-E(X)]^2 | [x_i-E(X)]^2* P(X=x_i) |
---|---|---|
4000 | ( 4000- 1120)^2=8 294 400 | 8 294 400* 0.25= 2 073 600 |
3600 | ( 3600- 1120)^2=6 150 400 | 6 150 400* 0.15= 922 560 |
-800 | ( -800- 1120)^2=3 686 400 | 3 686 400* 0.40= 1 474 560 |
-500 | ( -500- 1120)^2=2 624 400 | 2 624 400* 0.20= 524 880 |
Sum of Values | 4 995 600 |
Finally, let's take the square root of the variance to find the standard deviation. Standard Deviation: sqrt(4 995 600)≈ $ 2235
To determine which option Jordan should advise her father to accept, let's compare the expected values of the two funds first.
Measures of the Probability Distributions | ||
---|---|---|
Expected Value of Fund I | $ 1875 | |
Expected Value of Fund II | $ 1120 | |
Standard Deviation of Fund I | ≈ $ 1494 | |
Standard Deviation of Fund II | ≈ $ 2235 |
To determine which option Jordan should advise her father to accept, let's first compare the expected values of the two funds. Expected Values Fund I: & E(X)=$ 1875 Fund II: & E(X)=$ 1120 This comparison shows that Fund I is the better option because its expected value is greater. We can confirm this by comparing the standard deviations of the funds. Standard Deviation Fund I: &σ≈ $ 1494 Fund II: &σ≈ $ 2235 We can see that the standard deviation of Fund II is almost twice that of Fund I. This implies that the expected value of Fund II will have about two times the variability of Fund I, meaning that Fund II is riskier, with a high chance for both gains and losses. This means that Jordan should advise her father to invest in Fund I.
A recent study shows that 71 % of high school students own a smartphone.
This situation represents a binomial experiment in which the probability of success p, that a chosen student owns a smartphone, is 0.71. The probability of failure q is 1- 0.71= 0.29, and the number of trials n is 10. p= 0.71 q= 0.29 n= 10 Let X be the random variable representing the number of students that own a smartphone. We are asked to find P(X≥ 8), which is the probability of at least 8 out of 10 students owning a phone. By the Addition Rule of Probability, we can calculate and add P(X=8), P(X=9), and P(X=10). Let's first calculate P(X=8).
We can determine the probability of the remaining values in a similar fashion.
x | _(10)C_x(0.71)^x(0.29)^(10-x) | P(X=x)= _(10)C_x(0.71)^x(0.29)^(10-x) |
---|---|---|
8 | _(10)C_8( 0.71)^8( 0.29)^(10- 8) | P(X= 8)≈ 0.24 |
9 | _(10)C_9( 0.71)^9( 0.29)^(10- 9) | P(X= 9)≈ 0.13 |
10 | _(10)C_(10)( 0.71)^(10)( 0.29)^(10- 10) | P(X= 10)≈ 0.03 |
Now, we add the probabilities to get P(X≥8).
Therefore, the probability that at least 8 of the 10 chosen students own a smartphone is about 40 %.
We want to estimate the number of students expected to own a smartphone when randomly selecting 40 students. Because this experiment follows a binomial distribution, we can find the expected value of X by multiplying the probability of success by the number of trials. Expected Value ofX E(X) = np In this case, n= 40 and p= 0.71. Let's evaluate the formula. E(X)= 40* 0.71 ⇕ E(X)≈ 28 This means that about 28 out of the 40 students are expected to own a smartphone.
Kriz found three simulations of a biased coin whose probabilities are unknown.
Number of Heads | Number of Tails | |
---|---|---|
Simulation 1 | 66 | 34 |
Simulation 2 | 7105 | 2895 |
Simulation 3 | 34 976 | 15 024 |
We want to estimate the theoretical probability of the coin landing on tails in a single trial given that the coin is biased. To do so, we will determine the experimental probabilities using the given data. Let's first find the total number of trials in each simulation by adding the observations of each row.
Number of Heads | Number of Tails | Number of Trials | |
---|---|---|---|
Simulation 1 | 66 | 34 | 66+34=100 |
Simulation 2 | 7105 | 2895 | 7105+2895=10 000 |
Simulation 3 | 34 976 | 15 024 | 34 976+15 024=50 000 |
Now that we have calculated the total number of trials, we can determine the experimental probability of heads and tails by dividing each entry by the total number of trials.
Probability of Getting Heads | Probability of Getting Tails | Number of Trials | |
---|---|---|---|
Simulation 1 | 66/100=0.66 | 34/100=0.34 | 100 |
Simulation 2 | 7105/10 000=0.7105 | 2895/10 000=0.2895 | 10 000 |
Simulation 3 | 34 976/50 000=0.69952 | 15 024/50 000=0.30048 | 50 000 |
From the Law of Large Numbers, we know that as the number of trials increases, the experimental probability tends to the theoretical probability. In this case, we can see that as the number of trials increases, the experimental probabilities of the biased coin tend to 0.7 for heads and 0.3 for tails. P(Heads)≈ 0.7 P(Tails)≈ 0.3 Therefore, we can say that the theoretical probability of the biased coin landing on tails is about 0.3.