Tutorial 4
A random variable
is a numerical description of the outcome of an experiment.
Discrete random variable Continuous random variable
(measured)
(counted)
a finite number of values or value in an interval
an infinite sequence of values [0; 2]
{0, 1, 2, 3, 4, … }
𝑃(𝑋 ≥ 2) and 𝑃(𝑋 > 2) are different 𝑃(𝑋 ≥ 2) = 𝑃(𝑋 > 2)
Probability Distributions for Discrete Random Variable X
The probability for each value of the random variable x : p(x).
Required conditions. {𝟎 ≤ 𝒑(𝒙) ≤ 𝟏 ; ∑ 𝒑(𝒙) = 𝟏
Expected Value and Variance
Expected Value Variance
The expected value, or mean, of a We use variance to summarize the
random variable is a measure of the variability in the values of a random
central location for the random variable.
variable.
𝑉𝑎𝑟(𝑥) = 𝜎 = (𝒙 − 𝝁)𝟐 × 𝒑(𝒙)
𝐸𝑋 = 𝜇 = 𝒙 × 𝒑(𝒙)
The standard deviation, 𝜎, is defined as the positive square root of the variance.
Binomial Probability Distribution – 𝐵(𝑛, 𝑝)
1. The experiment consists of a sequence of 𝑛 identical trials.
2. Two outcomes are possible on each trial. We refer to one outcome as a
success and the other outcome as a failure.
3. The probability of a success, denoted by p, does not change from trial to trial.
Consequently, the probability of a failure, denoted by 1 − 𝑝, does not change
from trial to trial.
4. The trials are independent.
BINOMIAL PROBABILITY FUNCTION (Table 989)
𝑓(𝑥) = 𝐶 × 𝑝 × (1 − 𝑝)
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
EXPECTED VALUE VARIANCE
𝐸(𝑥) = 𝜇 = 𝑛𝑝 𝑉𝑎𝑟(𝑥) = 𝜎 = 𝑛𝑝(1 − 𝑝)
Continuous Probability Distributions
Normal Distribution Standard Normal Distribution
1. Bell shape curve 1. Bell shape curve
2. Total area =1 2. Total area =1
3. Symmetrical 3. Symmetrical
4. 𝜇=0
5. 𝜎=1
Normal Probability Density Function Converting to the standard normal random
variable
1 ( )
𝑓(𝑥) = 𝑒 𝑥−𝜇
√2𝜋𝜎 𝑧=
𝜎
Using the standard normal probability table (979)
𝑃(𝑎 < 𝑥 < 𝑏) = 𝑓(𝑥)𝑑𝑥
𝑃(𝑧 < 𝑏)
4.1. Consider the experiment of tossing a coin twice.
a. List the experimental outcomes.
b. Define a random variable that represents the number of heads occurring on the two
tosses.
c. Show what value the random variable would assume for each of the experimental
outcomes.
d. Is this random variable discrete or continuous?
Solution
a. Head, Head (H, H)
Head, Tail (H, T)
Tail, Head (T, H)
Tail, Tail (T, T)
b. Let X = number of heads on two coin tosses.
c.
Outcome Values of X
(H,H) 2
(H,T) 1
(T,H) 1
(T,T) 0
d. Discrete. Since values of the random variable is obtained by counting and can
be listed. It may assume 3 values: 0, 1, and 2.
4.2. Consider the experiment of a worker assembling a product.
a. Define a random variable that represents the time in minutes required to assemble the
product.
b. What values may the random variable assume?
c. Is the random variable discrete or continuous?
Solution
a. Let X = time (in minutes) required to assemble the product.
b. It may assume any positive value: x > 0.
c. Continuous. Since values of the random variable is obtained by measuring
4.3. A technician services mailing machines at companies in the Phoenix area. Depending
on the type of malfunction, the service call can take 1, 2, 3, or 4 hours. The different types
of malfunctions occur at about the same frequency.
a. Develop a probability distribution for the duration of a service call.
b. Draw a graph of the probability distribution.
c. Show that your probability distribution satisfies the conditions required for a discrete
probability function.
d. What is the probability a service call will take three hours?
e. A service call has just come in, but the type of malfunction is unknown. It is 3:00 p.m.
and service technicians usually get off at 5:00 p.m. What is the probability the service
technician will have to work overtime to fix the machine today?
Solution
a.
Duration of Call
x p(x)
1 0.25
2 0.25
3 0.25
4 0.25
1.00
b.
f (x)
0.30
0.20
0.10
x
0 1 2 3 4
c. P (x) ≥ 0 and P(1) + P (2) + P (3) + P (4) = 0.25 + 0.25 + 0.25 + 0.25 =
1.00
d. P (3) = 0.25
e. P(overtime) = P (3) + P (4) = 0.25 + 0.25 = 0.50
4.4. Consider a binomial experiment with n = 20 and p = .25.
a. Compute P(0).
b. Compute P(3).
c. Compute P(x ≤ 3).
d. Compute P(x ≥ 1).
e. Compute E(x).
f. Compute Var(x) and σ.
Solution
a. P (0) = .0032
b. P(3) = .1339
c. P(x 3) = P (0) + P (1) + P (2) + P(3)
= .0032 + .0211 + .0669 + .1339 = .2251
d. P(x 1) = 1 - P (0) = 1 - .0032 = .9968
e. E(x) = n p = 20 (.25) = 5
f. Var(x) = n p (1 - p) = 20 (.25) (.75) = 3.75
= 3.75 1.936
4.5. According to a survey conducted by TD Ameritrade, one out of four investors have
exchange-traded funds in their portfolios (USA Today, January 11, 2007). Consider a
sample of 10 investors.
a. Compute the probability that exactly 4 investors have exchange-traded funds in their
portfolios (danh mục đầu tư).
b. Compute the probability that at least 2 of the investors have exchange-traded funds in
their portfolios.
c. If you found that exactly 6 of the investors have exchange-traded funds in their
portfolios, would you doubt the accuracy of the survey results?
d. Compute the expected number of investors who have exchange-traded funds in their
portfolios.
e. What are the variance and standard deviation of the number of investors who have
exchange-traded funds in their portfolios?
Solution
a. p = ¼ = .25
n
P( x) ( p ) x (1 p) n x
x
10
P(4) (.25)4 (1 .25)10 4
4
20! 20(19)(18)(17)
P(4) (.25) 4 (.75) 6 (.25) 4 (.75) 6
4!(20 4)! 4(3)(2)(1)
b. P(x 2) = 1 – P(0) – P(1)= 1 – .0563 - .1877 = .756
c. Using the binomial tables P(6) = .0162
And, with P (7) = .0031, P (8) = .0004, P (9) = .0000, and P (10) = .0000, the
probability of finding that 6 or more investors have exchange-traded funds in
their portfolio is so small that it is highly unlikely that p = .25. In such a case,
we would doubt the accuracy of the results and conclude that p must be
greater than .25.
d. = n p = 10 (.25) = 2.5
e. Var(x) = n p (1 - p) = 10 (.25) (.75) = 1.875
= 1.875 1.369
4.6. Given that z is a standard normal random variable, compute the following probabilities.
a. P(z ≤ -1.0)
b. P(z ≥ 1.0)
c. P(z ≥ 1.5)
d. P(2.6 ≤ z)
e. P(-3 ≤ z ≤ 0)
Solution
a. P(z -1.0) = .1587
b. P(z ≥ 1.0) =1- P(z 1.0) =1- .8413 = .1587
c. P(z ≥ 1.5) = 1 - P(z 1.5) = 1 - .9332 = .0668
d. P(2.6 ≤ z) = 1 - P(z < 2.6) = 1 - .9953 = .0047
4.7. Given that z is a standard normal random variable, find z for each situation.
a. The area to the right of z is .2743.
b. The area between -z and z is .9312.
c. The area between -z and z is .2052.
d. The area to the right of z is .9834.
e. The area to the left of z is .4404.
Solution
a. Area to the left of z is 1 - .2743 = .7257. So z = .6.
b. Compute .9312/2 = .4656; z corresponds to a cumulative probability of .5000
+ .4656 = .9656. So z = 1.82.
c. . Compute .2052/2 = .1026; z corresponds to a cumulative probability of .5000
+ .1026 = .6026. So z .26= .
d. Area to the left of z is 1 - .9834 = .0166. So z = -2.13.
e. The z value corresponding to a cumulative probability of .4404 is z = -0.15.
4.8. Suppose that the mean daily viewing time of television is 8.35 hours. Use a normal
probability distribution with a standard deviation of 2.5 hours to answer the following
questions about daily television viewing per household.
a. What is the probability that a household views television between 5 and 10 hours a day?
b. How many hours of television viewing must a household have in order to be in the top
3% of all television viewing households?
c. What is the probability that a household views television more than 3 hours a day?
Solution
a.
10 8.35
z 0.66
2.5
5 8.35
z 1.34
2.5
P 5 x 10 P(0.66 z 1.34) P( z 1.34) P( z 0.66) .9099 .7454 .1645
b.
P x x0 P( z z0 ) 3%
z0 1.88
x0 z0 * 1.88* 2.5 8.35 13.05
So, a household must have approximately 13.05 hours of television viewing to be
in the top 3% of all television viewing households.
3 8.35
c. z 2.14
2.5
P x 3 P( z 2.14) 1 P( z 2.14) 1 .0162 .9838
