week 6 probability

Question 1

define probability

Answer 1

the likelihood that an outcome occurs between 0 and 1

Question 2

what is an experiment

Answer 2

process that results in an outcome

Question 3

what is an outcome

Answer 3

result that we observe

Question 4

what is a sample space

Answer 4

collection of all possible outcomes of an experiment

Question 5

what is an event

Answer 5

each possible outcome of the experiment

Question 6

what is simple probability

Answer 6

described by a single characteristic eg a random day in January

Question 7

what is a joint probability

Answer 7

described by 2 or more characteristics eg a random day in January that was also a weekday

Question 8

what is the complement of an event

Answer 8

all events that are not part of that event eg all the days in 2016 that are not january

Question 9

what is the sum of all probabilities

Answer 9

1

Question 10

What is marginal probability

Answer 10

the probability of an event irrespective of the outcome of the other joint event

Question 11

what are mutually exclusive events

Answer 11

events that cannot occur simultaneously eg a day cannot be in January and February

Question 12

what are collectively exhaustive events

Answer 12

one of the events must occur and the set of events covers the entire sample space

Question 13

what is conditional probability

Answer 13

probability of one event occuring given that another has already occured

Question 14

two events are independent if

Answer 14

probability of one event is not affected by the fact that another has ocurred

Question 15

what does bayes theorem calculate

Answer 15

revises previously calculated probabilities based on new info

Question 16

bayes theorem formula

P(Bi|A)=

Answer 16

P(A|Bi)P(Bi) / P(A|Bi)P(Bi) + … + P(A|Bn)P(Bn)

Question 17

what is another name for the expected vallue

Answer 17

mean

Question 18

why might a weighted average need to be used

Answer 18

some variables are more important than others

Question 19

when can binomial distribution be used

Answer 19

• two outcomes
• mutually exclusive
• collectively exhaustive
• fixed number of observations
• probabilities are consistent

Question 20

When can Poisson distribution be used

Answer 20

when you are interested in the number of times an event occurs given an area of oppurtunity

Question 21

what is an area of opportunity

Answer 21

unit, interval of time,, volume, inwhihc more than one occurrance of an event can occur

Question 22

In normal distribution mean, median and mode are equal. True or false

Answer 22

true

Question 23

what is uniform distribution

Answer 23

when smallest value and largest value are equally likely, all values are equally likely

Question 24

How to shift a normal graph from left to right

Answer 24

Change mean

Question 25

How to increase or decrease the spread of a normal distribution

Answer 25

change standard deviation

Question 26

How can we tell a distribution is normal

Answer 26

interquartile range is 1.33std bell shaped mean = median

Question 27

what is standard error of the mean

Answer 27

measure of variability in the mean from sample to sample

Question 28

does standard error of the mean increase or decrease as sample size increases

Answer 28

decreases

Question 29

what is considered a large enough sample to be normal

Answer 29

30

Question 30

what is sampling distribution

Answer 30

distribution of all sample means

Question 31

what is a confidence interval

Answer 31

a range of values based on observation from one sample

Question 32

general formula for confidence interval

Answer 32

point estimate +/- (critical value * standard error | )

Question 33

what is a point estimate

Answer 33

sample statistic of the population parameter of interest

Question 34

what is the critical valu

Answer 34

based on confidence level eg critical value of a 95% confidence level is 1.96

Question 35

what is the most important critical value in the world of business

Answer 35

95%

Question 36

when do we know to use the z value and t value

Answer 36

z value when you know the standard deviation of the population and its mean if its sample data use t

Question 37

as the sample size increases, does the t value move closer or further from the z value

Answer 37

closer

Question 38

what is needed to calculate the ideal sample size to estimate the mean within a certain interval of error

Answer 38

critical value st dev acceptable error

Question 39

how to calculate degree of freedom

Answer 39

size - 1