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ST102 Michaelmas Term Revision LSE London School of Economics

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You are on page 1of 40

**Elementary Statistical Theory
**

Revision lectures – Michaelmas Term material

Dr James Abdey

†

†

Department of Statistics

London School of Economics and Political Science

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 1

Examination arrangements

Thursday, May 22nd 2014, 10:00–13:00.

**Please double-check the time in your examination timetable on LSE
**

for You (published by week 1 of ST), in case of (extremely unlikely)

changes to the date and time.

In the examination, you will be provided with:

Murdoch and Barnes: Statistical Tables, 4th edition.

**The only tables from this that you will (may) need are for the
**

standard normal, t, χ

2

, F and Wilcoxon distributions. These tables

are also on the ST102 Moodle site, so make sure you are familiar with

their layout.

**A formula sheet (at the end of the examination paper). This is also
**

on the ST102 Moodle site.

For general administrative matters on examinations see:

http://www2.lse.ac.uk/intranet/students/registrationTimetablesAssessment/

examinationsAndResults/examTimetables/ExamTimetable.aspx

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 2

A word on calculators

You can also use a scientiﬁc calculator, as prescribed by examination

procedures.

The rubric on the front of the examination paper will say:

‘Scientiﬁc calculators are permitted in the examination, as prescribed

by the School’s regulations. If you have a programmable calculator,

you must delete anything stored in the memory in the presence of an

invigilator at the start of the examination.’

In short, graphics calculators are permitted (the graphics capability

will be of no beneﬁt in the examination). However, any

programmable memory must be re-set in the presence of an

invigilator at the start of the examination.

Although many statistical calculations can be performed on scientiﬁc

calculators, you must still show all your working in your answer

booklet.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 3

Structure of the examination paper

The question paper contains seven questions, all given equal weight

(20 marks each).

Section A: two compulsory questions; Section B: ﬁve questions.

Answer both questions from Section A, and three questions from

Section B.

If you answer more than three questions from Section B, only your

best 3 answers will count towards the ﬁnal mark. However, you are

strongly advised to only attempt 3 questions from Section B to

make eﬃcient use of your time.

Each question in each section could cover any part of the syllabus.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 4

Structure of the examination paper

The ﬁnal mark is out of 100.

Pass mark for the examination is 40.

Important note: Re-sit candidates only will sit the ‘old’

examination paper structure which was in place in the 2012–13

academic year. All past examination papers on Moodle have the

‘old’ structure.

A specimen 2014 examination paper with the ‘new’ structure is also

available on Moodle.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 5

Notes on examination ‘tactics’

Make sure you do not miss out on any marks that you can get!

**i.e. try to give time to all questions you attempt, and not to get
**

stuck on any single question.

Some (parts of) questions are entirely standard and straightforward,

some are more challenging. So try to make sure you do not miss out

on the standard ones at least, bearing in mind that:

The questions are not in order of diﬃculty.

Parts of questions (e.g. 1(a), 1(b), . . .) are not in order of diﬃculty.

**Questions may be answered in any order but keep answers to each
**

question in one place in your answer booklet!

Remember that partial credit is given for partially correct answers.

The only guaranteed way to get a 0 is an empty answer book!

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 6

Preparing for the examination

Only the topics covered in the lecture notes are included in the

examination

**... except for the ‡ topics in MT, and others (if any) that may be
**

explicitly stated as not examinable, mainly LT after Section 6.10 and

Section 7 on ANOVA.

Among these topics, all are potentially examinable.

**However, some are, of course, more central than others, and more
**

likely to turn up in the examination.

**Use the lecture notes, exercises and (especially) recent examination
**

papers to form an idea of which topics are most prominent in this

respect, and to decide which ones to give most weight to in your

preparation.

Also read the textbook on these topics, if it helps you.

Substantive queries about the material are best posted in Moodle

Q&A forum (so everyone can read the response).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 7

Past examination papers

Most relevant are papers from 2008 onwards (including the 2008

mock).

Older examination papers exist, but...

they include further topics that are no longer covered

the solutions are not always complete and contain some errors

**the style of the questions is generally diﬀerent from more recent ones.
**

These can be accessed (with LSE username and password) at:

https://library-2.lse.ac.uk/protected-exam/index.html

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 8

The rest of today

Outline of the most important topics and results from MT.

You should deﬁnitely at least remember these!

**In the examination you can take these results as known and use them,
**

unless told otherwise (i.e. unless a question explicitly asks you to

prove some of them).

Examples of common types of questions, from past examinations.

**If you suspect any typos or errors in the solutions, please query them
**

in the Moodle Q&A forum.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 9

Key topics covered in MT

1. Descriptive statistics

**Not often separate examination questions, but some of these (e.g.
**

¯

X

and S

2

) appear in other questions.

2. Set theory and counting rules (used in probability questions).

3. Probability: deﬁnition, classical probability, independence,

conditional probability, Bayes’ theorem.

4. Random variables: deﬁnition, pf/pdf and cdf, expected values and

variances, medians, moment generating functions.

5. Common probability distributions: discrete and continuous uniform,

Poisson, binomial, exponential and normal.

6. Multivariate probability distributions: independence of random

variables, conditional and marginal distributions, sums and products

of random variables, covariance and correlation.

7. Sampling distributions: random (IID) samples, statistics and their

sampling distributions, the central limit theorem.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 10

Set theory

Basic rules of set-theoretic operations:

A ∩ B = B ∩ A and A ∪ B = B ∪ A

A ∩ (B ∩ C) = (A ∩ B) ∩ C and A ∪ (B ∪ C) = (A ∪ B) ∪ C

A∩(B ∪C) = (A∩B) ∪(A∩C) and A∪(B ∩C) = (A∪B) ∩(A∪C)

(A ∩ B)

c

= A

c

∪ B

c

and (A ∪ B)

c

= A

c

∩ B

c

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 11

Set theory

Let S be the sample space and A ⊂ S. Then:

∅ ⊂ A and ∅

c

= S

A ∩ ∅ = ∅ and A ∪ ∅ = A

A ∩ S = A and A ∪ S = S

A ∩ A

c

= ∅ and A ∪ A

c

= S

A ∩ A = A and A ∪ A = A

(For these and other similar results, see slides 122–123.)

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 12

Counting rules

Remember that in ‘classical probability’ problems, where all

outcomes are equally likely, probability calculations involve counting

outcomes (see slides 141–142).

See slide 155 for the basic counting formulae.

Counting possibilities directly (without the formulae) is also ﬁne, if

you can do it (i.e. in small problems).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 13

Probability: deﬁnition and key properties

See slide 128 for the axioms of probability.

The basic properties of the probability function P (slide 136):

P(S) = 1 and P(∅) = 0.

0 ≤ P(A) ≤ 1 for all events A.

P(A

c

) = 1 −P(A).

P(A ∪ B) = P(A) + P(B) −P(A ∩ B).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 14

Some crucial results and deﬁnitions

Independence: A and B are independent if P(A∩B) = P(A)P(B)

and if A

1

, A

2

, . . . , A

n

are independent, then

P(A

1

∩ A

2

∩ · · · ∩ A

n

) = P(A

1

)P(A

2

) · · · P(A

n

).

Conditional probability:

P(A| B) =

P(A ∩ B)

P(B)

, provided P(B) > 0.

Multiplication rule: P(A ∩ B) = P(A| B)P(B) and its extensions

(see slide 181–182).

If A

1

, A

2

, . . . , A

n

form a partition of the sample space (see slide

124):

**Total probability formula: P(B) =
**

n

j =1

P(B | A

j

)P(A

j

)

Bayes’ theorem:

P(A

i

| B) =

P(B | A

i

)P(A

i

)

P(B)

=

P(B | A

i

)P(A

i

)

n

j =1

P(B | A

j

)P(A

j

)

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 15

Example question

Question: A, B and C are independent events. Prove that A and

(B ∪ C) are independent.

Solution: Using rules for set-theoretic operations and basic properties of

probability:

P[A ∩ (B ∪ C)]

= P[(A ∩ B) ∪ (A ∩ C)]

= P(A ∩ B) + P(A ∩ C) −P[(A ∩ B) ∩ (A ∩ C)]

= P(A ∩ B) + P(A ∩ C) −P(A ∩ B ∩ C)

= P(A)P(B) + P(A)P(C) −P(A)P(B)P(C)

= P(A)[P(B) + P(C) −P(B)P(C)]

= P(A)[P(B) + P(C) −P(B ∩ C)] = P(A)P(B ∪ C)

and thus A ⊥⊥ (B ∪ C).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 16

Example question

Question: If a committee of three persons is to be formed from a group

of ﬁve men and four women, what is the probability that at least two of

the committee are women, given that there is at least one woman on the

committee?

Solution: Let A = ‘There are at least two women on the committee’ and

B = ‘There is at least one woman on the committee’. Note that A ⊂ B,

so A ∩ B = A. Calculate ﬁrst:

P(No women on the committee) =

_

5

3

_

/

_

9

3

_

= 10/84

P(One woman on the committee) =

__

5

2

__

4

1

__

/

_

9

3

_

= 40/84

Then P(B) = 1 −10/84 = 74/84, P(A) = 1 −[10/84 +40/84] = 34/84,

and

P(A| B) =

P(A ∩ B)

P(B)

=

P(A)

P(B)

=

34

74

= 0.4595.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 17

Example question

Question: We know that 3% of the population have a particular heart

condition. A screening test has a 70% chance of identifying the condition

if it is present, but has a 20% chance of recording a positive result when

it is not. Evaluate the probability that a patient who gets a positive test

result actually has the condition.

Solution: Let H = ‘Person has the condition’ and D = ‘Test is positive’.

Then P(H) = 0.03, P(H

c

) = 0.97, P(D | H) = 0.7 and P(D | H

c

) = 0.2.

Using Bayes’ theorem, we get:

P(H | D) =

P(D | H)P(H)

P(D)

=

P(D | H)P(H)

P(D | H)P(H) + P(D | H

c

)P(H

c

)

=

0.7 ×0.03

0.7 ×0.03 + 0.2 ×0.97

=

0.021

0.021 + 0.194

= 0.098.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 18

Probability distributions of random variables

Suppose X is a continuous random variable, f (x) is its probability density

function (pdf) and F(x) is its cumulative distribution function (cdf). Key

results for these:

pdf must satisfy (i.) f (x) ≥ 0 for all x, and (ii.)

_

∞

−∞

f (x) d(x) = 1.

F(x) = P(X ≤ x) =

_

x

−∞

f (t) dt.

P(a < X ≤ b) = F(b) −F(a) =

_

b

a

f (x) d(x) for any a ≤ b.

F

(x) = f (x).

Similar results, except for the last one, also hold for the cdf and

probability function p(x) = P(X = x) of a discrete random variable (with

integration replaced by summation over the possible values of X).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 19

Expected values, variances and medians

For a continuous random variable X, we have:

E(X) =

_

∞

−∞

xf (x) dx

E[g(X)] =

_

∞

−∞

g(x)f (x) dx for any function g

Var(X) = E[(X −E(X))

2

] =

_

∞

−∞

(x −E(X))

2

f (x) dx

= E(X

2

) −(E(X))

2

F(m) = 0.5

where m denotes the median of X.

Similar deﬁnitions for a discrete random variable, with sums instead of

integrals (and a modiﬁed deﬁnition of the median, see slide 288).

Expected values and variances of sums and products of random variables:

see slide 433.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 20

Moment generating functions

The moment generating function (mgf) of a continuous r.v. X is:

M

X

(t) = E(e

tX

) =

_

∞

−∞

e

tx

f (x) dx.

For discrete random variables, integration is replaced by summation, and

f (x) by p(x).

In both cases:

M

X

(0) = E(X)

and M

X

(0) = E(X

2

)

which also gives:

Var(X) = E(X

2

) −(E(X))

2

= M

X

(0) −(M

X

(0))

2

.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 21

Example question

Question: The weights, in kilograms, of a certain species of ﬁsh caught

oﬀ the coast of Cornwall have a continuous distribution well-described by

the probability density function:

f (x) =

_

c(6x −x

2

−5) 1 ≤ x ≤ 5

0 otherwise.

(a) Determine the value of the constant c; (b) Derive the cumulative

distribution function and evaluate the median and expected value of X.

Solution: This very common type of question requires integration. In an

examination answer you must show the intermediate steps of the

integration, even though they are omitted here for brevity.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 22

Example question

Solution continued: (a) Here:

_

∞

−∞

f (x) dx = c

_

5

1

(6x −x

2

−5) dx = c ×32/3

and since the integral must be 1, we have x = 3/32.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 23

Example question

Solution continued: (b) We have:

_

x

1

(3/32)(6t −t

2

−5) dt = (9x

2

−x

3

−15x + 7)/32

so:

F(x) =

_

¸

_

¸

_

0 for x < 1

(9x

2

−x

3

−15x + 7)/32 for 1 ≤ x ≤ 5

1 for x > 5.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 24

Example question

Solution (b) continued:

The median m is the solution to F(m) = 0.5.

Since you cannot solve this third-degree equation directly, there must be

another way.

Since the expected value E(X) = 3 is exactly half-way between 1 and 5,

you might guess that this is because the distribution is symmetric around

3. If this is the case, the median is also equal to 3. Direct calculation

then shows that indeed F(3) = 0.5, so m = 3.

(This reminds us that in any question some parts may be routine, while

others may involve a twist!)

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 25

Example question

Solution (b) continued:

The expected value is given by:

E(X) =

_

∞

−∞

xf (x) dx = (3/32)

_

5

1

x(6x −x

2

−5) dx = 3

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 26

Common probability distributions

You should memorise, and can then use, the pf/pdf, cdf, mean, variance

and median (if given) of the following distributions:

Binomial

Poisson

Discrete and continuous uniform

Exponential

Normal.

If any other distribution is used in a question, you will be given formulae

for them (or asked to derive them, as part of the question).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 27

Common discrete distributions

Poisson distribution for counts x = 0, 1, 2, . . . .

Binomial distribution for the number x of ‘successes’ out of n trials.

Common type of question: calculate probabilities or expected values

for these distributions, given some value of their parameters.

For the binomial distribution with large n, the normal approximation

is often used:

i.e. Bin(n, π) is approximately N(nπ, nπ(1 −π)) (see slide 377)

the table of the standard normal distribution is then used

**then remember to include the continuity correction (see slide 379).
**

Remember also results for sums of independent binomial and

Poisson random variables: see slide 443.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 28

The normal distribution

For a normal distribution X ∼ N(µ, σ

2

), it is important to remember (in

addition to the pdf, mean E(X) = µ and variance Var(X) = σ

2

) that:

Linear combinations and sums of normally distributed random

variables are also normally distributed (see slide 445).

In particular, the standardised variable

Z =

X −µ

σ

∼ N(0, 1)

With standardisation, calculations of probabilities for any normal

distribution can be transformed into calculations for a standard

normal [N(0, 1)] distribution.

The normal distribution tables that you have in the examination

show values of 1 −Φ(z) = P(Z > z) of the standard normal

distribution.

**You should know how to do these calculations (see slides 365–376 for
**

the rules and examples).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 29

Example question

Question: In the construction of a certain assembly, four rods of length

X

1

, X

2

, X

3

and X

4

are connected end-to-end to form a composite rod to

span a gap of width Y. To function satisfactorily the length of the

composite rod must exceed the size of the gap by not less than 0.10 cm.

The lengths X

1

, X

2

, X

3

and X

4

are independently normally distributed

with mean 4.0 cm and variance 0.015 cm. Y is also normally distributed

with mean 15.94 cm and variance 0.024 cm, independently of the lengths

of the rods.

Find the probability that the assembly is satisfactorily formed at the ﬁrst

attempt. Out of 10 independent composite rods, what is the probability

that two and only two are satisfactory?

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 30

Example question

Solution: Let C = X

1

+ X

2

+ X

3

+ X

4

be the length of the composite

rod.

Then C is also normally distributed with mean 4 ×4.0 = 16.0 and

variance 4 ×0.015 = 0.06.

Since Y ∼ N(15.94, 0.024) independently of C, the diﬀerence is also

normally distributed with:

D = C −Y ∼ N(16.0 −15.94, 0.06 + 0.024) = N(0.06, 0.084).

The probability we need is:

P(D ≥ 0.1) = P

_

D −0.06

√

0.084

≥

0.1 −0.06

√

0.084

_

= P(Z ≥ 0.14) = 1 −Φ(0.14) = 0.4443

where Z ∼ N(0, 1).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 31

Example question

Solution continued: For the second part of the question, let X now

denote the number of satisfactory rods out of 10 independent rods.

Then X ∼ Bin(10, 0.4443). The probability we need is

P(X = 2) =

_

10

2

_

×(0.4443)

2

×(1 −0.4443)

8

= 45 ×(0.4443)

2

×(1 −0.4443)

8

= 0.081.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 32

Multivariate distributions

If random variables X

1

, X

2

, . . . , X

n

are independent, the pf/pdf of

their joint distribution is the product of their univariate marginal

pfs/pdfs (see slides 426–430).

Key concepts for the general (possibly non-independent) case were

introduced mainly in the context of a bivariate discrete random

variable (X, Y):

**Marginal distributions (see slides 395–396):
**

p

X

(x) =

y

p(x, y) and p

Y

(y) =

x

p(x, y)

**Conditional distributions, for example (see slide 404):
**

p

Y | X

(y | x) = P(Y = y | X = x) =

P(X = x and Y = y)

P(X = x)

=

p(x, y)

p

X

(x)

Covariance and correlation: measures of association between any

two random variables (see slides 415–419).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 33

Example question

Question: The table below speciﬁes the joint probability distribution of

the random variables X and Y:

X

−1 0 1

−1 0.05 0.15 0.10 0.30

Y 0 0.10 0.05 0.25 0.40

1 0.10 0.05 0.15 0.30

0.25 0.25 0.50 1

(a) Identify the marginal distribution of Y, and the conditional

distribution of X | Y = 1.

(b) Evaluate the covariance of X and Y.

(c) Are X and Y independent?

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 34

Example question

Solution: (a) Conveniently, the summation to give the marginal

distribution p

Y

(y) is already included in the table. So:

p

Y

(−1) = 0.30, p

Y

(0) = 0.40, p

Y

(1) = 0.30

and p

Y

(y) = 0 for all other y.

The conditional pf is:

p

X | Y

(x | Y = 1) = p

X,Y

(x, 1)/p

Y

(1) = p

X,Y

(x, 1)/0.30

i.e.

p

X | Y

(−1 | Y = 1) = 0.10/0.30 = 0.33

p

X | Y

(0 | Y = 1) = 0.05/0.30 = 0.17

p

X | Y

(1 | Y = 1) = 0.15/0.30 = 0.50

and p

X | Y

(x | 1) = 0 for all other x.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 35

Example question

Solution: (b) First we need the marginal expected values:

E(Y) =

y

yp

Y

(y) = −1 ×0.30 + 0 ×0.40 + 1 ×0.30 = 0

and E(X) = 0.25, similarly. We also need:

E(XY) =

x

y

xyp

X,Y

(x, y)

= −1 ×(0.10 + 0.10) + 1 ×(0.05 + 0.15) + 0 = 0

so

Cov(X, Y) = E(XY) −E(X)E(Y) = 0 −0.25 · 0 = 0.

(c) Even though the covariance is 0, X and Y are not independent. For

example, p

X

(1)p

Y

(0) = 0.20 = 0.25 = p

X,Y

(1, 0). Therefore it is not the

case that p

X,Y

(x, y) = p

X

(x)p

Y

(y) for all x, y.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 36

Sampling distributions

Random sample from a distribution f (x; θ): Random variables

X

1

, X

2

, . . . , X

n

which are independent and each has the same

distribution f (x, θ) (see slide 454)

**i.e. n independent and identically distributed (IID) random variables.
**

A statistic is a function of the variables in the sample which does

not depend on unknown parameters (i.e. its value in a sample can

be calculated when a sample is observed) (see slide 458).

A statistic is a random variable. Its distribution is the sampling

distribution of the statistic (see slide 459).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 37

Sampling distribution of the sample mean

Consider a random sample X

1

, . . . , X

n

from a distribution with mean

E(X

i

) = µ and variance Var(X

i

) = σ

2

.

For the sampling distribution of

¯

X =

n

i =1

X

i

/n, the mean and

variance are always E(

¯

X) = µ and Var(

¯

X) = σ

2

/n, rsepectively.

About the shape of the sampling distribution we know the following:

If the X

i

s are normally distributed:

¯

X ∼ N(µ, σ

2

/n) (1)

Even when X

i

are not normally distributed, (1) holds approximately

when n is large enough. This is the central limit theorem (CLT)

(see slides 475–477).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 38

Sampling distribution of the sample mean

A common application is when X

i

∼ Bin(1, π).

Let S =

n

i =1

X

i

, which is distributed as S ∼ Bin(n, π).

Then

¯

X = S/n = ˆ π is the sample proportion of observations with

value X

i

= 1.

The CLT then says that approximately:

ˆ π ∼ N(π, π(1 −π)/n).

This also implies that approximately:

S = nπ ∼ N(nπ, nπ(1 −π)).

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 39

Example question

Question: A random sample of 100 individuals is telephoned and asked

various questions. One of the questions was ‘Do you consider that in

general the products for sale in AB Stores are of high quality?’. Suppose

the percentage in the general population who believe that the products

are of high quality is 30%. Let S denote the number of people in the

sample who answer ‘Yes’ to the question. Evaluate P(S ≤ 25).

Solution: Here the 100 individual responses are a random sample from

the distribution X

i

∼ Bin(1, 0.3), so S ∼ Bin(100, 0.3).

Let Y ∼ N(100 ×0.3, 100 ×0.3 ×0.7) = N(30, 21).

Here it is useful to use a continuity correction in the calculation, so:

P(S ≤ 25) = P(Y ≤ 25.5) = P

_

Y −30

√

21

≤

25.5 −30

√

21

_

= P(Z ≤ −0.98) = 0.1635

(where Z ∼ N(0, 1)), using the table of the standard normal distribution.

ST102 Elementary Statistical Theory Dr James Abdey ST 2014 Revision lectures – MT material 40

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