Probability & Probability Distribution – PR Notes

 Type of Events in theory of Probability

 mutually exclusive events: P(A,B)=0
 independent events
 dependent events
 equally likely events
 collectively exhaustive events

 Classical Theory of Probability: p+p(bar)=1

 P (A or B) = P (A) + P (B) - P (A and B)

 (Independent Events)
P (A and B) = P (A) x P (B)
P (A, B and C) = P (A) x P (B) x P (C)
 Case 2 (Dependent Events)
P (A and B) = P (A) x P (B/A)
Assuming event ‘A’ is followed by event ‘B’

P (A and B) = P (B) x P (A/B)

Assuming event ‘B’ is followed by event ‘A’

P (ABC) = P (A) x P (B/A) x P (C/AB)

Assuming event ‘A’ is followed by event ‘B’ is
followed by event ‘C’.

Distribution

Observed Theoretical/
Distribution Probability
Distribution

Discrete:
Binomial, Continuous:
Poission Normal
P (r) = nCr pr qn-r = n Cr pn (p=q)

P(r) denotes the probability of getting exactly r success.

 Poisson distribution: If in a Binomial Distribution, n is very large & p is very

small, such that the product ‘np’ is a constant (lambda), then Binomial distribution reduces to
Poisson distribution.
 For a normal distribution mean, median and mode are all equal
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Class Notes - Kachwala

Sampling distribution
Inferential statistics – to infer characteristics of population from characteristics of sample (covered in
session 8-19 as per course outline)
 Sampling distribution
 Estimation
 Testing of Hypothesis
Central Limit Theorem
Cost-benefit analysis

Single sample test for arithmetic mean: session 13-19 main topic
Single sample test for proportion of success
Variance-ration test (F-test)
Ki-square test: involves cross-tabulation (pivot table) [marginal probability, joint probability etc]

How to know whether selected distribution is correct in given situation?

Null Hypothesis: Statement of assumption that forms a basis of LOGICAL thinking

Level of significance