Chapter_6_Random_variables_and_discrete_probability_distributions.pdf

1 CHAPTER 6: RANDOM VARIABLES AND DISCRETE PROBABILITY DISTRIBUTIONS 1. DEFINITIONS 2. PROBABILITY OF A DISCRETE RANDOM VARIABLE 3. EXPECTED VALUE, VARIANCE AND STANDARD DEVIATION 4. BIVARIATE DISTRIBUTION AND COVARIANCE 5. BINOMIAL DISTRIBUTION 6. POISSON DISTRIBUTION 1. DEFINITIONS Random Variable: a variable which contains the outcomes of a chance experiment. A random variable assigns a numerical value to each simple event in a sample space, thereby enabling us to work with numerical-valued outcomes. Discrete Random Variable: A random variable is discrete if the number of possible values that it can assume is finite or countably infinite; otherwise, the random variable is continuous. Examples - Number of new subscribers to a magazine - Number of bad checks received by a restaurant - Number of absent employees on a given day. Other Example Event: Toss a coin five times. Count the number of tails: 0, 1, 2, 3, 4 or 5 times A discrete probability distribution lists all possible values that a discrete random variable can take on, together with the probability that each value will be assumed. So, a discrete probability distribution is a list of all possible [Xj , P(Xj)] where Xj is the random variable and P(Xj) is the probability associated with value. Probabilities are mutually exclusive. When constructing a discrete probability distribution, bear in mind that the probabilities must sum to 1. Σ P(Xi )= 1 and 0 ≤ P(X) ≤ 1 Examples of discrete probability distribution - binomial - Poisson - hypergeometric 2 2. PROBABILITY OF A DISCRETE RANDOM VARIABLE A table, formula or graph that lists all possible values of a discrete random variable can assume, together with associated probabilities, is called a discrete probability distribution. To calculate P(X =x), the probability that the random variable assumes the value x, add the probabilities of all the simple events for which X is equal to x.