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Probability Distributions
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Random Variables
Random Variable
Represents a numerical value
associated with each outcome of a
probability distribution.
Denoted by x
Examples
x = Number of sales calls a salesperson
makes in one day.
x = Hours spent on sales calls in one
day.
2012 Pearson Education, Inc. All rights reserved.
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Random Variables
Discrete Random Variable
Has a finite or countable number of
possible outcomes that can be listed.
Example
x = Number of sales calls a salesperson
makes in one day.
x
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Random Variables
Continuous Random Variable
Has an uncountable number of
possible outcomes, represented by
an interval on the number line.
Example
x = Hours spent on sales calls in one
x
day.
0
24
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Discrete Probability
Distributions
In Words
In Symbols
0 P (x) 1
P (x) = 1
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24
33
42
30
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P (2)
P (4)
P (5)
P (3)
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P(
x)
0.16
0.22
0.28
0.20
0.14
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Probability, P(x)
0.15
0.1
0.05
0
1
Score, x
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Mean
Mean of a discrete probability distribution
= xP(x)
Each value of x is multiplied by its corresponding
probability and the products are added.
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Solution: x
1
P(x)
0.16
0.22
0.28
0.20
xP(x)
1(0.16) =
0.16
2(0.22) =
0.44
3(0.28) =
0.84
=4(0.20)
xP(x)==
0.80
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2 ( x ) 2 P ( x)
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x
1
2
3
4
5
P(x)
0.16
0.22
0.28
0.20
0.14
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P(x)
(x )2
(x )2P(x)
0.16
(1.94)2 = 3.764
3.764(0.16) =
0.602
0.22
(0.94)2 = 0.884
0.884(0.22) =
0.194
0.28
(0.06)2 = 0.004
0.004(0.28) =
0.001
0.20
2
(1.06)2 =
=
21.124
= (x )1.124(0.20)
P(x) =
Variance:
0.225
0.14
Standard Deviation:
2012 Pearson Education, Inc. All rights reserved.
(2.06)2 = 4.244
2
4.244(0.14) =
0.594
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Expected Value
Expected value of a discrete
random variable
Equal to the mean of the random
variable.
E(x) = = xP(x)
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gain
gain
gain
gain
for
for
for
for
the
the
the
the
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$498
1
1500
$248
1
1500
$148
1
1500
$73
1
1500
$2
1496
1500
E (x ) xP (x )
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