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Published by: Pankaj Singh Baghel on Apr 18, 2013
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A review of basic probability and statistics, random variables and their properties, Estimation of means variances and correlation





―Probability is the chance that something will happen – how likely it is that some event will happen.‖

Sometimes you can measure a probability with a number: "10% chance of rain", or you can use words such as impossible, unlikely, possible, even chance, likely and certain.
Example: "It is unlikely to rain tomorrow".

.TERMINOLOGY: Outcome: The end result of an experiment...g.. (e. We denote the events by upper case letters such as A. B or A1.. For example. the outcome would be anyone of the six faces.. We denote the sample space by S .) Random event: A random event is an outcome or set of outcomes of a random experiment that share a common attribute. if the experiment consists of throwing a die. tossing a coin. F6 ). throwing a die.. F1. . measuring the noise voltage at the terminals of a resistor etc. considering the experiment of throwing a die.F6 Random experiment: An experiment whose outcomes are not known in advance... an event could be the 'face F1 ' or 'even indexed faces' (F2 . F4 . A2 ⋅ ⋅ ⋅ ⋅ Sample space: The sample space of a random experiment is a mathematical abstraction used to represent all possible outcomes of the experiment. For example.

Hence if A and B are mutually exclusive. {also written as (A + B) or ( A or B )} is the set of all outcomes which belong to A or B or both. denoted A ∪ B . Union of events: The union of two events A and B . Intersection of events: The intersection of two events. is the set of all outcomes which belong to A as well as B . This concept can be generalized to the union of more than two events. The intersection of A and B is denoted by (A ∩ B) or simply (AB) . Occurrence of an event: An event A of a random experiment is said to have occurred if the experiment terminates in an outcome that belongs to A. This concept can be generalized to the case of intersection of three or more events. they cannot occur together. . The intersection of A and B is also referred to as a joint event A and B .Mutually exclusive (disjoint) events: Two events A and B are said to be mutually exclusive if they have no common elements (or outcomes). A and B .

is an event with no sample points. . Null event: The null event.Complement of an event: The complement of an event A. then AB = φ and vice versa). Thus φ = S (note that if A and B are disjoint events. denoted φ . denoted by A is the event containing all points in S but not in A.

There are two approaches to probability of an event E 1. Frequency Approach . Classical Approach 2.

Classical Approach: 𝑷 𝑬 = 𝒏 𝑬 𝒏 𝑺 i. what is the probability. Classical Approach assumes that all outcomes are equally likely. a random word is picked. of ways an event can happen to the no. Solution: 𝒏 𝑬 𝒏 𝑺 n(E) = All possible jumbles of ―BIRD‖ = 4! n(S) = Those jumbles starting with ―B‖ = 3! 𝑷 𝑬 = in this problem So. of ways sample space can happen. Example: If out all possible jumbles of the word ―BIRD‖. is the probability of the event. that this word will start with ―B‖.e. 𝑷 𝑬 = 𝒏 𝑬 𝒏 𝑺 = 𝟒! = 𝟒 𝟑! 𝟏 . The ratio of no.

P(E)=Lim n→∞ n(E)/( N) Where N is the no. of times the event E occurs. of students 10 Solution: B 20 C 30 D 40 N = Total no of students = 100 By frequency Approach. Example: From the following table find the probability of obtaining ―A‖ grade in exam Grade A NO.Frequency Approach: Since sometimes all outcomes may not be equally likely. where probability is defined as the relative frequency of occurrence of E. a more general approaches is the Frequency Approach.1 . p(A Grade)=n(A Grade)/N=10/100=0. of times exp is performed and n(E) is the no.

. ex: roll a die — assign the numbers 1. ex: students attending class on a given day — P(C = 0) = . we can examine the random process through its properties. 3. P(D = 2) = 1/6. 1 if the person is female as the random variable G Once we have defined a random variable. . etc. 2. P(G = 1) . ex: a person walking in the door — P(G = 0) = . ex: roll a die — P(D = 1) = 1/6. The pattern of probabilities that are assigned to the values of the random variable is called the probability distribution of the random variable. 4.RANDOM VARIABLES: It is a rule that assigns a number to each of the outcomes of a random process. 6 as the random variable D ex: students attending class on a given day — assign the number of people who actually attend as the random variable C ex: a person walking in the door — assign 0 if the person is male.7. 5.

11.10.9. any of which value.6. from 0 to 500.3. x may take.5. Now x may be a no. Example: Let x denotes sum of two dice.4. now x is a discrete random variable as it can take one value from the set (2.8.7. .12) Since the sum of two dice can only be one of these values Continuous Random Variable: A variable that can take one volume form a continuous range of values. Example: x denotes the volume of Pepsi in a 500 ml cup. Discrete Random Variable: A variable that can take one value from a discrete set of values.Types Of Random Variables: Random variable may be discrete or continuous.

we can summaries large quantities of data. using statistics. Measure Of Central Tendency 2. Two descriptive measures are often used to summarise data sets. to do this. Statistics uses some no.Statistics is a branch of mathematics which gives us the tools to deal with large quantities of data and drive meaningful conclusion about the data. or measures which describes the general features contained in the data. Measures Of Dispersion The central tendency measure indicates the average value of data. These are 1. In other words. . by a few descriptive measures. where ―Average‖ is a generic term used to indicate a representative value that describes the general centre of the data.

variance and coefficient of variance are examples of dispersion measures. Mean.The description measure characteristic the extent to which data items differ from the central tendency value. Standard deviation. In other words dispersion measures and quantifies the variation in the data. the more the variation amongst the data items. Median and Mode are some examples of central tendency measures. The larger this no.. .

Harmonic mean (HM) .MEAN: In statistics. The expected value of a random variable. mean has three related meanings 1. Geometric mean (GM) 3. 2. 3. The mean of a probability distribution. Examples of means: 1. The arithmetic mean of a sample (distinguished from the geometric mean or harmonic mean). Arithmetic mean (AM) 2.

often simply called the "mean".Arithmetic mean (AM): The arithmetic mean is the "standard" average. 36. 75 is . the arithmetic mean of five values: 4. 50. For example. 45.

50.Geometric mean (GM): The geometric mean is an average that is useful for sets of positive numbers that are interpreted according to their product and not their sum (as is the case with the arithmetic mean) e. For example. the geometric mean of five values: 4. 36.g. 75 is: . 45. rates of growth.

75 is . 45. the harmonic mean of the five values: 4.Harmonic mean (HM) : The harmonic mean is an average which is useful for sets of numbers which are defined in relation to some unit. For example. 36. for example speed (distance per unit of time). 50.

and HM: AM. . GM. GM.Relationship between AM. and HM satisfy these inequalities: Equality holds only when all the elements of the given sample are equal.

In that context. . describing how far the numbers lie from the mean (expected value). It is one of several descriptors of a probability distribution. In particular. those based on moments are advantageous in terms of mathematical and computational simplicity. or the theoretical probability distribution of a sample (a not-fully-observed population) of numbers.VARIANCE: In probability theory and statistics. The variance is a parameter describing in part either the actual probability distribution of an observed population of numbers. the variance is one of the moments of a distribution. it forms part of a systematic approach to distinguishing between probability distributions. the variance is a measure of how far a set of numbers is spread out. In the latter case a sample of data from such a distribution can be used to construct an estimate of its variance: in the simplest cases this estimate can be the sample variance. While other such approaches have been developed.

Examples: The variance of a random variable or distribution is the expectation. taking account of all possible values and their probabilities or weightings (not just the extremes which give the range). of the squared deviation of that variable from its expected value or mean.5 Its expected absolute deviation—the mean of the equally likely absolute deviations from the mean—is . Thus the variance is a measure of the amount of variation of the values of that variable. For example. when thrown. or mean. has expected value of 1/6(1+2+3+4+5+6) = 3. a perfect six-sided die.

25.5 + 1.5 + 0.1/6(|1-3.5|+|4-3.5|+|3-3. if a coin is tossed twice.5 and 2 with probability 0.5|+|5-3. Thus the expected value of the number of heads is: .25.5 + 2.5 But its expected squared deviation—its variance (the mean of the equally likely squared deviations)—is As another example.5|+|2-3. 1 with probability 0.5|+|6-3.5) = 1.5 + 1. the number of heads is: 0 with probability 0.5|) = 1/6(2.5 + 0.

and the variance is: .

the variance of a variable has units that are the square of the units of the variable itself. however the expected absolute deviation tends to be more robust as it is less sensitive to . a variable measured in inches will have a variance measured in square inches. For this reason.9 ≈ 1. and. In the dice example the standard deviation is √2. is used frequently in theoretical statistics. For example.Units Of Measurement: Unlike expected absolute deviation. The standard deviation is more amenable to algebraic manipulation than the expected absolute deviation. The standard deviation and the expected absolute deviation can both be used as an indicator of the "spread" of a distribution.7.5. slightly larger than the expected absolute deviation of 1. describing data sets via their standard deviation or root mean square deviation is often preferred over using the variance. together with variance and its generalization covariance.

neither. then the variance of X is the covariance of X with itself. continuous. From the corresponding expression for Covariance. given by: That is. the variance is the expected value of the squared difference between the variable's realization and the variable's mean. This definition encompasses random variables that are discrete.Definition: If a random variable X has the expected value (mean) μ = E[X]. or mixed. it can be expanded: .

.A mnemonic for the above expression is "mean of square minus square of mean". The variance of random variable X is typically designated as Var(X). or simply σ2 (pronounced "sigma squared"). .

dependence refers to any statistical relationship between two random variables or two sets of data. and 2. Correlation refers to any of a broad class of statistical relationships involving dependence.CORRELATION: In statistics. Correlation is Positive when the values increase together. 1. Correlation is Negative when one value decreases as the other increases .

. and if it is positive or negative.Correlation can have a value:  1 is a perfect positive correlation  0 is no correlation (the values don't seem linked at all)  -1 is a perfect negative correlation The value shows how good the correlation is (not how steep the line is).

Example: Ice Cream Sales The local ice cream shop keeps track of how much ice cream they sell versus the temperature on that day. here are their figures for the last 12 days: .

. the relationship is good but not perfect.9575 . In fact the correlation is 0. see how I calculated it. .And here is the same data as a Scatter Plot: You can easily see that warmer weather leads to more sales..

a2 and b2 for every value Step 4: Sum up a × b. and the mean of y Step 2: Subtract the mean of x from every x value (call them "a"). how to calculate it without software: Let us call the two sets of data "x" and "y" (in our case Temperature is x and Ice Cream Sales is y): Step 1: Find the mean of x. such as the CORREL() function in Excel or Open Office Calc .. sum up a2 and sum up b2 Step 5: Divide the sum of a × b by the square root of [(sum of a2) × (sum of b2)] . There is software that can calculate it . do the same for y (call them "b") Step 3: Calculate: a × b.How To Calculate: By using "Pearson's Correlation"..

in onlinecourses.science.iitm.       nptel.edu wikipedia.psu.org mathsisfun.ac. Santos An Introduction to Basic Statistics and Probability by Shenek Heyward Introduction to Basic Statistics by Pat Hammett .com Elementary Probability by David A.

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