Probability, Distributuion and Time Series

PROBABILITY, DISTRIBUTION AND TIME SERIES-DR SRIRAM MURALI
Probability
There are two types of experiment
1. Deterministic Experiments
2. Probabilistic Experiment or Random experiment.
Deterministic Experiment:
When the experiment in science and engineering are repeated under identical
conditions, we get almost the same result every time.
Example: A deterministic event always has the same outcome and is predictable 100% of the
time.
1. The sun rising in the east.
2. James Bond winning the fight without a scratch
Random Experiment:
Performing an experiment with definite outcome Or A probabilistic event is an event
for which the exact outcome is not predictable 100% of the time.
Example
1. Tossing a coin in which we have certainly one outcome if the coin the coin unbiased.
2. Writing an examination in which the results are certain either pass or fail.
Note: We are here dealing with objective probability, since subjective probability is basically
dependent on Personal judgment, Belief, attitude, character and bias of a person,
management decisions.
Definition of Probability: (Classical)
no of favourable events(E.E, E.L.E, M.E.E) n (A)
Probability of an event= , i.e. P (A) =
total number of events (E.E) n (s)
Example: What is the probability of a head occurring in one toss of a coin?

The number of favorable events is 1 (one head) and the number of total events is 2
(Head or tail). In this case, the probability formula verifies what is obvious.
1
Probability of a head =
2
1|Page
Axioms of Probability:
1. Probability is kind of measure therefore it cannot be negative.
2. 0 ≤ P (A) ≤ 1
3. 3. P(S) =1, S-sample space
4. P (  ) =0
5. ∑P (A) =1 (Total probability =1)
−
6. P (happening event) + P (not happening event) =1 i.e. P (A) +P ( A ) =1
Notation for Probability Questions
Instead of writing out the whole question, the following notation is used.
1. What is the probability of event A occurring? = Probability (A) = P(A)
2. What is the probability of events A and B occurring? = P(A and B) = P(A) and P(B)
3. What is the probability of events A or B occurring? = P(A or B) = P(A) or P(B)
Trial:
Performing the random experiment is called trial.
Example: Rolling a die, tossing a coin.
Sample Space:
It is a set of all possible outcomes of a random experiment and it is denoted by S.
Example: on rolling a die the sample space are {1, 2, 3, 4, 5, 6}, on tossing a coin {H, T} is a
sample space.
Events:
Outcome of the random Experiment
Example: on rolling a die the sample space are {1, 2, 3, 4, 5, and 6} are an events, on tossing a
coin {H, T} are an events.
Types of Events:
Certain event:
It is an event associated with random experiment if it always occurs whenever the
experiment is performed.
Impossible Events:
2|Page
It is an event associated with random experiment if it never occurs whenever the
experiment is performed.
Example: None of the possible outcomes {H, T} are Vowels.
Example: none of the possible outcomes 1, 2, 3, 4, 5, 6 is divisible by 7.
Mutually Exclusive events: (or,  , +)
Two or more cannot occur together (or) Happening of one event excludes the happening of
other.
Example: Consider the random experiment of rolling die A, B, C are any three events then A=
Getting an even number, B= Getting an odd number, C= Getting multiple of 7 .Here A= {2, 4,
6} B= {1, 3, 5} C= {3, 6}
Clearly A  B =  , B  C=  , C  A= 
Notation: P (A or B) = P (A  B) = P (A) + P (B)

Addition theorem on probability:
For two events "A" and "B" which are not disjoint (or not mutually exclusive), the probability
that at least one of the events would occur i.e. the probability of the occurrence of the union
of the events is given by P (A  B) = P (A) + P (B) – P (A  B)
Example
Suppose we wish to find the probability of drawing either a king or a spade in a single
draw from a pack of 52 playing cards.
Solution: We define the events A = 'draw a king' and B = 'draw a spade'
Since there are 4 kings in the pack and 13 spades, but 1 card is both a king and a spade,
We have: = 4/52 + 13/52 - 1/52 = 16/52.
Three Non-Disjoint (Non-Mutually Exclusive) Events:
P(A ∪ B ∪ C) = P(A) + P(B) + P(C) − P(A ∩ B) − P(A ∩ C) − P(B ∩ C) + P(A ∩ B ∩ C).
Important Remark:
P(A ∪ B ∪ C) = P(A) + P(B) + P(C) [Mutually Exclusive]
P(A ∪ B ∪ C) = 1 [Exhaustive]
P(A ∪ B ∪ C) = P(A) + P(B) + P(C) = 1 [Mutually Exclusive and Exhaustive]
3|Page
Independent Events: (&,  X)
Two or more event are said to be independent event if happening of one event does not
influence the happening of other.
Example: on tossing a coin, an event of getting the head in the I trail doesn’t influence the II,
III...
Notation: P (A & B) = P (A  B) = P (A) x P (B)
Example: What is the probability of getting a raise and that the sun will shine tomorrow?
Given: Probability of getting a raise = P(r) = .10
Probability of the sun shining = P(s) = .30
The events are independent. P (raise) and P(sunshine) = P(r) x P(s) = .10 x .30 = .03 or 3%
Conditional Events:
These are events that are dependent on what occurred previously.
Example: If five cards are drawn from a deck of fifty-two cards, the likelihood of the fifth
card being an ace is dependent on the outcome of the first four cards.
Introduction to Multiplication Theorem on Probability:
The probability of the simultaneous occurrence of two events A1 and A2 is equal to the
product of the product of the probability of A1 and the conditional probability of A2 given that
A1 has occurred or it is equal to the product of the probability of A2 and conditional
probability of A1 given A2(using multiplication theorem).
(i.e) P (A1∩A2) =P (A1).P (A2/A1), whenever P (A1) ≠0
=P (A2).P (A 1/ A 2), whenever P (A 2) ≠0
If A 1 andA 2 are independent, then P (A 1/ A 2) =P (A 2)so that P (A 1∩ A 2) =P (A1)*P (A 2).
Note: Occurrence of event A implies Occurrence of another event B if P (B/A) = 1
FIND THE PROBABILITY OF SIMULTANEOUS OCCURRENCE OF TWO OR MORE EVENTS BY
USING MULTIPLICATION THEOREM.
Example
A bag contains 10 white and 15 black balls. Two balls are drawn in succession without
replacement. What is the probability that first is white and second is black?
Solution: Consider the following events:
4|Page
A = getting a white ball in first draw, B = getting a black ball in second draw.
Required probability, Probability of getting a white ball in first draw and a black ball in second
draw
10c1 2
= P( A and B)=P(AB)= P(A)P(B/A) [By Multiplication Theorem]...(i) = P (A) = = and
15c1 5
P(B A) = Probability of getting a black ball in second draw when a white ball has already been
15c 5
in first draw 1 = ( 4 balls are left after drawing a white ball in first draw out of which 15
24c1 8
are black )
2 5
Substituting these values in (i), we have, Required probability=P (AB) =P (A) P (B/A) = × =
5 8
2
8
Example
A bag contains 5 white, 7 red and 8 black balls. If four balls are drawn one by one without
replacement, find the probability of getting all white balls.
SOLUTION Let A, B, C, D denote events of getting a white ball in first, second, third and
fourth draw respectively. Then,
Required probability =P (ABCD)
Required probability=P (A) P (B/A) P(C/AB) P (D/A B C)...(i)
5 1
Now, P (A) = Probability of drawing a white ball in first draw = = .
20 4
When a white ball is drawn in the first draw there are 19 balls left in the bag, out of which 4
4
are white. P (B/A) = .
19
Since the ball drawn is not replaced, therefore after drawing a white ball in second draw
3
there are 18 balls left in the bag, out of which 3 are white. P(C/AB) =
18
After drawing a white ball in third draw there are 17 balls left in the bag, out of which 2 are
2
white, P(D/ABC)=
17
1 4 3 2
Hence, required probability, P(ABCD)=P(A)P(B/A)P(C/AB)P(D/ABC) = × × × .
4 19 18 17
Equally Likely events or equally probable or mutually symmetric events:

Events are said to equally likely if they have same chances to occur.
I.e.The outcomes of an experiment are equally likely to occur when the probability of each
outcome is equal.
5|Page
Example:
A and B are playing tennis. The event of A or B winning the match is_____________.'
A. a likely event B. an unlikely event C. an equally likely event.
Solution: Both A and B have equal 2: So, it is an equally likely event.
Example: Getting spade and Ace are not an equally likely event, since they cannot separate.
Important Set Theory: (Concept)
P(A-B) Verbal description of data Equivalent set theoretic notation =
Not A ̅
A
A or B A∪B
A and B A∩B
A but not B ̅
A∩B
Neither A nor B ̅∩B
A ̅
Atleast one of the event A, A∪B∪C

B, C
Exactly one of the A and B (A ∩ B ̅ ∩B)
̅)∪(A
All the 3 events A, B, C A∩B∩C

− − −
Exactly two of the A, B, and
(A∩B∩ C ) ∪( A∩ B ∩C) ∪( A ∩B∩C)
C
P(A∩B’) = P (A) – P(A∩B) P(B-A) = P(A’∩B) = P (B) – P(A∩B)

= P(A∪B)-P(B) = P(A  B)-P(A)
Demorgan’s Law:
P(A’∪B’) = P(A∩B)’ P(A’∩B’) = P(A∪B)’
Relation between Mutually Exclusive event (M.E.E) and Independent event (I.E):
For M.E.E is always unique but for I.E minimum two events has to occur.
M.E.E doesn’t imply I.E. Similarly I.E doesn’t imply M.E.E
It can be interpret in the following ways
1. P(A ∩B) = 0  M.E.E
6|Page
2. A ∩B = φ  M.E.E
3. P (A or B)  P (A) + P (B)  not M.E.E

4. P (A∩B)  P (A) x P (B)  A and B are not I.E.
M.E.E or D.E
The events A and B can be M.E.E and I.E together if either P(A) = or P(B) = 0.
In I.E we need minimum two outcomes, if we separate (Disjoint) these outcomes then it is
M.E.E. If we take together or simultaneously then it may be independent or dependent.
Relation between Independent event I.E and Exhaustive event E.E:
I.E ↛ E.E (Since in I.E we have to multiply all the events but multiplying all events it never be
equal to 1. If all the events are sure events then by multiplying we get one, which rare or
impossible).
Relation between Independent event I.E and dependent event D.E:
1. Let P (A∩B) = P (A) x P (B)  A and B are I.E
P (A∩B) P (A∩B)
P (A/B) = , p(B) ≠ 0 P (B/A) = , p(A) ≠ 0
p(B) p(A)
P (A).P(B) P (A).P(B)
= , p(B) ≠ 0 = , p(A) ≠ 0
p(B) p(A)
= P (A) = P (B)
2. If A and B are M.E.E,
P (A∩B) P (A∩B)
then P (A/B) = , p(B) ≠ 0 P (B/A) = , p(A) ≠ 0
p(B) p(A)
0 0
= , p(B) ≠ 0 = , p(A) ≠ 0
p(B) p(A)
=0 = 0.
P (A∩B)
3. Also P (A/B) = , p(B) ≠ 0
p(B)
 1 − P( B' )  0
 P (B’)  1  B’ is not a sure event.

̅
4. ̅) = P (A∩B) , P(B
On the other handP(A/B ̅) ≠ 0
̅ p(B)
7|Page
 1 − P(B)  0
 P (B)  1  B is not a sure event
The occurrence of event A  the occurrence of another event B

P (B/A) = 1.
Odds in Favours and Against:

Odds means ratio between the number of favourable outcome and the number of
unfavorable outcomes.
m n
If odds in favor of an event A are in the ratio m: n then P (A) =, , P (A’) =
m+n m+n
n m
If odds against an event B are in the ratio m: n then P (B) = , , P (B’) = , .
m+n m+n
Example: Among 52 cards, odds of drawing a heart are 13:39, because there are 13 cards
which are hearts and 39 cards which are not hearts.
Probability means ratio between the number of favourable outcome and the total number of
outcomes. So, among 52 cards, probability of drawing a heart is 13:52.
Now odds are reported as ratios, so 13:39 is reported as 1:3. This is also called 3:1 against.
Note: Probability is reported as a fraction, proportion or percentages, so 13:52 is 13/52 i.e.

1/4 or 25% or 0.25
Cumulative probability Distribution:

It is given by F(x) = P (X  x).
Example: If two dices are rolled. Find the probability distribution and cumulative probability
distribution. Also represent in graph.
Solution: X- random variable is sum of the two numbers
X 1 2 3 4 5 6 7 8 9 10 11 12
P(x) - 1 2 3 4 5 6 5 4 3 2 1
36 36 36 36 36 36 36 36 36 36 36
F(x) 0 1 3 6 10 15 21 26 30 33 35 1
36 36 36 36 36 36 36 36 36 36
8|Page
Random Variable:
A real variable whose value is determined by the outcome of the random experiment.
Example: You toss a coin for 4 times. Three are 16 possible outcomes:
{HHHH, HHHT, HHTH, HHTT, HTHH, HTHT, HTTH, HTTT, THHH, THHT, THTH, THTT, TTHH,
TTHT, TTTH, TTTT}
(H = heads, T = tails) Now take X = number of heads.
X 0 1 2 3 4
P(X=x) 1/16 4/16 6/16 4/16 1/16
Example: What is the distinction between X (upper case) and x (lower case) in the table?
Solution: The distinction is important; X stands for the random variable in question, whereas
x stands for a specific value (0, 1, 2, 3, or 4) of X (so that x is always a number). Thus, if, say x
=2, then P(X = x) means P(X = 2), the probability that X is 2. Similarly, if Y is a random variable,
then P(Y = y) is the probability that Y has the specific value y.
Types of Random variable:
A discrete random variable is one which may take on only a countable number of distinct
values.
Example: On tossing 2 coins, X assumes R.V = no of heads
Sample HH HT TH TT Total
space
X (R.V) 2 1 1 0
P(X) 2 1 1 0  P(x) = 1
4 4 4
9|Page
A continuous random variables a random variable where the data can take infinitely many
values in the interval of the real line.
1
x2 − < 𝑥 < 3
Example: If a R.V takes the value in the interval, f(x) = { 2
0 otherwise
Probability Mass or distribution Function:

If P(x) is a probability function of random variable X, then it possesses the following
properties i) p(x) ≥ 0, ii) ∑ p(x) = 1
Probability density Function:
Continuous random variable, f(x) is a probability density function of random variable X,
and then it possesses the following properties i)f(x) ≥ 0, ii) ∫ f(x)dx = 1
Example
X is a continuous random variable with probability density function given by
f(x) = cx for 0 ≤ x ≤ 1, where c is a constant. Find c.
If we integrate f(x) b/w 0 and 1 we get c/2. Hence c/2 = 1 (from the useful fact above!), giving
c=2
Mathematical Expectation (Expected Value) of a Random Variable
Expectation or Average or Mean:
In probability theory the expected value (or mathematical expectation) of a random
variable is the sum of the product of the values within the range of the discrete random
variable and their respective probabilities of occurrence.
10 | P a g e
The "Mathematical Expectation" or the "Expected Value" {represented by E(x)} of "x" is given
by
Discrete Random Variable: E(X) = ∑ xi pi = x1 p1 + ⋯ + xn pn
E(X) = ∑ xi2 pi = x1 2 p1 + ⋯ + xn 2 pn
Continuous Random Variable
E(X) = ∫ x f(x) E(X) = ∫ x 2 f(x)
Properties of Expectation:
1. E(ax  b) = a E(X)+E(b) = a E(X)+b
2. E(constant) = Constant
3. E(XY) = E(X) E(Y)
4. E(x − x̅) = 0
Variance: (An average of the squares of the deviation taken from mean is called variance)
As with discrete random variables, Var(X) = E(X2) - [E(X)]2
1. Var (ax+b)= a2 V(X)+b
2. Var (constant)=0
Important Note:
1. Expectation is dependent of change of origin and scale.
2. Variance is independent of origin but not on scale. (Refer measures of central tendency
and dispersion)
Problems:
1.Two divisions of probability are A) subjective B) objective C) A or B D) A and B
2.Subjective probability is used in A) maths B) statistics C) management D) accounts
3.Limitations of classical definition of probability A) applicable when total number of events
is finite B) applicable if events are ELE C) applicable if events are IE D) A and B.
4.Statistical definition of probability, then probability of an event A is A) limiting value of the
ratio of the no. of times the event A occurs to the number of times the experiment is
repeated B) ratio of the frequency of the occurrences of A to the total frequency
5.Which of the following is mutually exclusive A) students reads in a school and studying
English B) x born in India and he is a doctor C) y is good singer &15 years old D) z is
under 15 and voter
6.If A = reading book B= playing game then A and B are A) MEE B) IE C) DE D) EE
7.find which of the two event do not occur simultaneously A) MEE B) IE C) DE D) EE
8.if P(A)=1 then A is A) sure B) impossible C) A or B D) A and B
9.if P(A)=0 then A is A) sure B) impossible C) A or B D) A and B
11 | P a g e
10.If P(A) = P(B) then A and B are A) same events B) MEE C) ELE D) IE
11.If P(A) = P(B) then A and B are A) same events B) different events C) ELE D) IE
12.If P (A and B) =0 then A and B are A) same events B) MEE C) ELE D) IE
13.If P (A and B) ≠ P(A) P(B) then A and B are A) same events B) MEE C) ELE D) DE
14.If P (A or B) =1, then A and B are A) same events B) MEE C) ELE D) EE
15.If P(A/B) = P(A) then A) A is IE of B B) B is IE of A C) complements are IE D) all
16.If A and B are IE then A) MEE B) not MEE C) not IE C) both B and C
17.If A and B are MEE then A) MEE B) not MEE C) IE C) not IE
18.If P(B/A) is defined by A) A is sure event B) B is sure event C) A is not an impossible event
D) B is an impossible event
19.If P(A/B’) is defined by A) B is not a sure event B) B is sure event C) B is an impossible
event D) B is not an impossible event
𝑝 𝑝
20.If p: q are the odds in favour of an event, then the probability of that event is A) B)
𝑞 𝑝+𝑞
𝑞
C)
𝑝+𝑞
5
21.If P(A)= then odds against the event A is A) 5:9 B) 5:4 C) 4:5 D) none
9
22.A, B, C are bidding for a contract. It is believed that A has exactly half the chance that B,
4
in turn, is th as likely as C to win the contract. What is the probability for each to win
5
2 4 5 2 7 5 2 8 5 2 9 5
the contract? A) , , B) , , C) , , D) , ,
11 11 11 11 11 11 11 11 11 11 11 11
23.3 horses A, B, C are in race. A is twice as likely to win as B and B is twice as likely to win
4 2 1 5 2 1 4 3 1 4
as C. what are the probabilities of winning respectively? A) , , B) , , C) , , D) ,
7 7 7 7 7 7 7 7 7 7
2 2
,
7 7
6 3 1 1
24.A, B and C are MEE and EE, so that P(A)=2P(B)=3P(C), find P(B)=? A) B) C) D)
11 11 6 3
25.If the probability of horse A winning a race is 1/6, a chance of horse B to win is ¼, find
the chance that one of the horses will win? A) 5/12 B)7/12 C) 1/12 D) none
26.If the probability of horse A winning a race is 1/6, a chance of horse B to win is ¼, find
the chance that both will win? A) 5/12 B)7/12 C) 1/12 D) none
27.If an average 9 ships out of 10 return safely to a port, the probability of one of the ships
return safely? A) 1/10 B)8/10 C) 9/10 D) none
28.If an average 9 ships out of 10 return safely to a port, the probability of one of the ship
does not return safely? A) 1/10 B)8/10 C) 9/10 D) none
29.In a family of 2 children has a girl, what is the probability that the other child is also a
girl? A) .50 B) .25 C) 1/3 D) 2/3
30.If two letters are taken at random from the word HOME find the chance that none of the
1 1 1
letters would be vowels? A) B) C) D) none.
6 2 3
31.5 horses in a race, Mr. A select two of horses at random and bets on them, the
4 2 1
probability that Mr. A selected the winning horse is A) B) C) D) none
5 5 5
12 | P a g e
2
32.The probability of winning game of a team is . What is the probability of winning more
3
2 16 19 8
than half of games? (P(X>2) =? reason being half of 3 is 1.5 is chance is )A) B) C) D)
3 27 81 64
none.
33.3 coins are tossed together, find the probability of i) no heads, ii) exactly 1 head, iii)
1 3 3 4 1 1 3 3 4 1
exactly 2 heads, iv) at least 1 head, v) all heads. A) , , , , B) , , , , C)
8 8 8 8 8 9 8 10 8 8
1 3 3 4 1
, , , , D) none
8 7 8 8 8
34.Two coins are tossed together, find chance that the second coin would show a tail given
that the first coin has shown a head? A) 0.5 B) .25 C) .75 D) .125
35.The probability of getting at least 3 heads in 8 Tosses of an unbiased coin is
A) 197/256 B) 199/256 C) 219/256 D) 217/256
36.A bag contains 6 green and 5 red balls, one ball is drawn at random. The probability of
getting a red ball? A) 5/11 B) 6/11 C) 5/6 D) none
37.Two balls are drawn from a bag containing 5 white and 7 black balls at random. What is
5 7 1 17
the probability that they would be of different colour A) B) C) D) .
12 12 4 36
38.A box contains 3 white, 5 red and 8 blue balls. 3 balls are taken at random, find the
probability i) all of them are white ii) exactly one white iii) at least 1 white iv) each ball is
1 39 234 286 120 1 39 236 286 120
of different colour A) , , , , B) , , , , C)
560 560 560 560 560 560 560 560 560 560
1 39 234 287 120
, , , , D) none
560 560 560 560 560
39.Bag contains 4 red and 5 black balls. Another bag contains 5 red, 3 black balls. If one ball
is drawn at random from each bag. Then the probability that one red and one black ball
drawn is A) 12/42 B) 25/72 C) 37/72 D) 13/72
40.A box contains 12 bulbs of 5 are defective, 3 bulbs are taken at random, find the
1 4 1 3 13 4
probability i) all are defective, ii) at least 2 defectives? A) , B) , C) , D)
22 11 22 11 22 11
none
41.Find a chance of getting at least one defective item if 3 items are drawn randomly from a
lot containing 6 items of which 2 defective item? A) .30 B) .20 C) .80 D).50
42.A bag contains 2 red, 3 green and 2 blue balls. If 2 balls are drawn at random from the
2 3 10
bag. Find the probability that none of them will be blue? A) B) C) D) none
5 5 21
43.An urn contains 3 white, 5 black and another urn contain 4 white, 2 black. One ball is
1 1
drawn from each of the bag find the probability of getting both white balls. A) B)
4 2
213
C) D) none
420
44.A class consist of 80 students, 25 of them are girls and 55 boys. 10 of them are rich and
the remaining poor, 20 of them are fair complexioned, what is the probability of
5 3 73
selecting a fair complexioned rich girl? A) B) C) D) none
512 512 412
45.A university has to select an examiner from a list of 50 persons, 20 of them women and
30 men, 10 of them knowing Hindi and 40 not. 15 of them being teachers and the
13 | P a g e
remaining 35 not. What is the probability of the University selecting a Hindi-knowing
women teacher? (a) 0.024 (b) 0.420 (c) 0.240 (d) 0.42
46.A committee of 5 members is to be selected from 8 boys and 3 girls the probability that
3 3 2
in which 2 particular girls include A) B) C) D) none
5 7 11
47.If four couples are placed in a room, two are selected at Random the probability that the
3 3 10
two were a gentleman and lady but not a couple? A) B) C) D) none
5 7 21
48.A team of 4 is to be selected from 6 boys and 5 girls, find the probability that it includes
2 1 5
Exactly 2 girls: A) B) C) D) none
5 2 11
49.A bag contains 6 red balls and some blue balls. If the probability of drawing a blue ball
from the bag is twice that of drawing red ball. Find the no of blue balls in the bag? A) 10
B) 12 C) 14 D) 16
50.A bag contains 5 red, 4 blue and M green balls if the probability of getting both the balls
1
Green, when two balls are selected at random is , find M? A) 5 B) 4 C) 9 D) 6
7
51.An urn contains nine balls of which three are red, 4 are blue and 2 green. Three balls are
drawn at random without replacement from the urn. The probability that the 3 balls
2 1 2 1
have different colour is? A) B) C) D)
7 21 23 50
52.A card is drawn out of standard pack of 52 cards. What is the probability that it is a king
2 5 7 1
or Red colour? A) B) C) D)
5 8 13 2
53.Find the probability of drawing spade on each of 2 consecutive draws from a well
2 3 3
shuffled Pack of cards when the draws are without replacement? A) B) C) D) none
5 5 4
54.One card is drawn from a pack of 52 cards. What is the probability it is a king or queen=?
3 2 10
A) B) C) D) none
5 13 21
1 7 10
55.From a pack of cards with joker then chance of getting spade king? A) B) C) D)
54 52 21
none
56.In a game, cards are thoroughly shuffled and distributed equally among four players.
52𝐶4 ×48𝐶13
What is the probability that a specific player gets all four kings? A) B)
52𝐶11
4𝐶4 ×48𝐶9 13𝐶9 ×39𝐶9
C)
52𝐶13 52𝐶13
57.The odds that a book will be reviewed favourably by 3 independent critics are 5 to 2, 3
to 4, 4 to 3 respectively, then the probability that out of 3 critics the majority will be
209 122 117
favourable? A) B) C) D) none
343 180 180
58.The odds that a book on business statistics will be favourably reviewed by 3 independent
critics are 2:3, 4:3 and 3:2 respectively. Find the probability of 3 review i) all will be
favourable, ii) majority will be favourable, iii) exactly 1 of them favourable, iv) exactly 2
24 94 63 70 157
of them favourable, v) at least 1 of them favourable? A) , , , , , B)
175 175 175 175 175
24 94 62 76 157 28 94 63 70 157
, , , , , C) , , , , D) none
175 175 175 175 175 175 175 175 175 175
14 | P a g e
59.If odds in favour of A is 5:7 and odds against B is 9:6 of solving a problem then
147 122 117
probability that a problem can be solved is A) B) C) D) none
180 180 180
60.The odds against a solving a problem are 4 to 3. And the odds in favour of B solving the
same problem are 7 to 5. What is the probability that the problem will be solved if they
15 16 17
both try? A) B) C) D) none
21 21 21
61.If 7:6 are the odds favour for the person ‘A’ will alive 5 years hence and 5: 3 are the odds
favour for the person ‘B’ will alive 5years hence, then the probability for at least one will
alive 5 years hence is A) 35/104 B) 21/26 C) 12/26 D) 43/52
1 1 1
62.A problem in statistics is given to 3 students A, B and C whose chances are , ,
2 3 4
respectively. Find the probability i) problem to be solved; ii) only one of them will solve?
3 11 3 1 3 11
A) , , B) , , C) , , D) none
4 24 4 24 4 25
1 1 1
63.Three marks men can hit the target with probabilities , , respectively, find the
2 3 4
1 3 1
probability that there are exactly 2 of them hits, if they hit together? A) B) C) D)
4 4 5
none
64.Ram is known to hit a target in 2 out of 3 shots where as Shyam is known to hit the same
target in 5 out of 11 shots. What is the probability that the target would be hit if they
9 6 10 3
both try? A) B) C) D) .
11 11 33 11
65.The probability that a girl student gets scholarship is 0.6 and that of a boy is 0.8, then
probability that at least one gets the scholarship is: A) 0.48 B) 0.92 C) 0.08 D) None
66.The probability that a cricket team winning a match at Kanpur is 2/5 and losing match to
Delhi 1/7. What is the probability team winning at least one match? A) 3/35 B) 32/35 C)
1/35.
67.Arun &Tarun appear for an interview for 2 vacancies. The Probability of Arun’s selection
is1/3 and that of Tarun’s selection is 1/5. Find the probability that only one of them will
2 1 1
be selected A) B) C) D) 𝑛𝑜𝑛𝑒
5 2 4
68.The probability that new airport will get an award for its design is 0.16, the probability
that will get an award for the efficient use of material is 0.24 and the probability that it
will get both awards is 0.11, find the probability that will get at least one of ghe two
awards? A) .29 B) .34 C) .89 D) none
[use :P(A) −𝑃(𝐴 ∩ 𝐵)+P(B) −𝑃(𝐴 ∩ 𝐵)]
69.Addition theorem on probability is A) 𝑃(𝐴 ∪ 𝐵) = 𝑃(𝐴) + 𝑃(𝐵) − 𝑃(𝐴 ∩ 𝐵) B)
(𝐴 ∪ 𝐵) = 𝑃(𝐴) + 𝑃(𝐵) + 𝑃(𝐴 ∩ 𝐵) C) (𝐴 ∪ 𝐵) = 𝑃(𝐴) − 𝑃(𝐵) − 𝑃(𝐴 ∩ 𝐵) D) none
70.Compound probability states A) 𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴) × 𝑃(𝐵) B) 𝑃(𝐴 ∪ 𝐵) = 𝑃(𝐴) × 𝑃(𝐵)
C) (𝐴 ∪ 𝐵) = 𝑃(𝐴) + 𝑃(𝐵) D) none
71.For any two events A and B, A) P(A-B)=P(A)-P(B) B) P(A-B)=P(A)- P(A∩B), C)P(A-B)=P(B)-
P(A∩B) D) P(B-A)=P(B)+ P(A∩ B)
72.If A and B are MEE then A) P(A-B) = P(A) B) P(B)=P(A-B) C)P(A)= P(A∩B) D) P(B)= P(A∩B)
15 | P a g e
73.For any two events A and B, A) P(A)-P(B)>P(A∩B) B) P(A)-P(B)<P(A∩B)C) P(A)-P(B)
≤P(A∩B)D) P(A)-P(B) ≥P(A∩B)
74.If P(A-B) = P(B-A), then two events satisfy A) P(A)=P(B) B) P(A)+P(B)=1 C) P(A∩B)=0 D) P(A
 B)=1
75.For two events A, B which of the following is true? a) P(A∩B)≤P(A), b) P(A  B) ≤P(A)+P(B)
c) P(A) ≤P(A∪B) d) All of the above
1 2 1
76.A and B are events of sample space, P(A)= , P(B) = and P(A∪B) = , find P(A∩ B), P(A-B),
4 5 2
3 1 1 17 1 3 7 5 17 1 3 1 4 17 1
P(B-A), 𝑃(𝐴̅ ∪ 𝐵̅), P(𝐴̅ ∩ 𝐵̅)=? A) A) , , , , B) , , , , C) , , , , D)
20 10 4 20 2 4 12 12 23 2 7 7 5 20 2
none.
77.if P (A U B) = 0.8 and P (A͵ՈB) = 0.3 then P (𝐴̅) + P (𝐵̅) is equal to: (a) 0.3 (b) 0.5 (c) 0.9 (d)
0.7
1 1
78.For two events A and B, given that P (A) =0.5, P(B) = and P (A∩B) = , find P(A/B), P(A 
3 4
3 1 4 3 7 5 3 1 4
B), P (𝐴̅ ∩ 𝐵̅) =? A) , , B) , , C) , , D) none.
7 7 5 4 12 12 7 7 5
79.If A and B are independent, P (A) = 0.4, P (A∪B) = 0.7. Find P (B) =? A) 0.5 B) 0.6 C) 0.3
80.If A and B are events, P (A) = 0.4, P (A∪B) = 0.8. Find P (A and B) =? A) 0.5 B) 0.6 C) 0.3
81.An investment consultant predicts that the odds against the price of a certain stock
going up is 2:1 and odds in favour of the price remaining the same are 1:3, what is the
5 7 10
probability that the price of the stock will go down? A) B) C) D) none
12 12 21
82.If 2 dice are rolled simultaneously then the probability that their sum is neither 3 nor 6 is
A) 0.5 B) 0.75 C) 0.25 D) 0.80
83.If a pair of dice is thrown what is the probability of occurring neither 7 nor 11?
A) 1/6 B) 1/8 C) 2/9 D) 7/9
84.Two dice are tossed what is the probability that the total is divisible by 3 or 4? A) 20/36
B)21/36 C) 14/36 D) none
1 2 1 1 7 10
85.If P (A) = , P (B) = , P (A  B) = Find P (𝐴̅ ∩ 𝐵̅) =? A) B) C) D) none
4 5 2 2 12 21
1
86.Let A and B are two events in a sample space such that P (A) = , P (B) =8, P (A∪B) =
2
3 3 1 3
,Find P (𝐴̅ ∩ 𝐵̅) =? A) B) C) D) D) none
4 4 4 16
1 1 1
87.If P (A) = , P (A/B) = , P (B/A) = , A and B are mutually exclusive A) No B) Yes C) cannot be
8 8 4
said D) none
1 1 1
88.If P (A) = , P (A/B) = , P (B/A)= , A and B are A) independent B) mutually exclusive C)
8 8 4
equally likely D) none
89.If P (A/B) = P (A) then A & B are A) Mutually exclusive B) dependent C) independent D)
composite
90.If A and B are independent, P (A) = 0.2, P (B) =0.3 P (A∪B) = 0.4. Find P (A/B) =? A) 0.5 B)
0.6 C) 0.3
91.For two events A and B, given that P (A)=0.4, P(B) = p and P (A∪B) =0.6, find p=? If A and
B are independent A) 0.2 B) 0.3 C) 0.5 D) none
16 | P a g e
92.For two events A and B, given that P (A) =0.4, P (B) = p and P (A∪B) =0.6, find p=? If A
and B are Mutually exclusive A) 0.2 B) 0.3 C) 0.5 D) none
93.P (not A) = 0.4, P (A∪B) =0.7, and A and B are independent events, find P (B)=? A) 0.5 B)
0.2 C) 0.25
94.P (not B) = 0.4, P (A∪B) =0.75, and A and B are independent events, find P (A) =? A) 0.5
3
B) 0.2 C)
8
95.If P (A ∪B) = P (A) then P (A∩ B) =? A) P (A) P (B) B) P (A) +P (B) C) 0 D) P (B)
96.If P (A) = .45, P (B) = .35 P (A and B) =.25 then P (A/B) =? A) 1.4 B) 1.8 C) .714 D) .556
97.if P(A)=1/2 P(B)=1/3 P(A∪B)=2/3, then P(A∩B)= ? A) 1/4 B) 1/6 C) 2/3 D) none
98.If P (A) =2/3 P (B) =3/8 P (A∩B) =1/4, then the events A and B are A) I.E and M.E.E B) I.E
but not M.E.E C) M.E.E but not I.E D) neither I.E nor exclusive.
2 1 1 1 7 1
99.If P(A)= P(B)= , P(A∩B)= , then P(A/B)= ? A) B) C) D) none
3 4 12 8 8 9
2 3 5 1 7 1
100.If P(A)= P(B)= , P(A∩B)= , then P(A/𝐵̅)= ? A) B) C) D) none
3 5 6 8 8 9
3 1 2 5
101.A and B are events 𝑃(𝐴 ∪ 𝐵) = 𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴) = 𝑡ℎ𝑒𝑛𝑃(𝐴 ∩ 𝐵̅) =? A) B)
4 4 3 12
3 4
C) D) none.
8 5
1 1 1
102.Let A and B be the events, 𝑃(𝐴 ̅̅̅̅̅̅̅
∪ 𝐵) = 𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴̅) = , then A and B are A)
6 4 4
equally likely and mututally exclusive B) equally likely but not independent C)
Independent but not equally likely D) mutually exclusive and independent
103.If C and D are two events such that C D and P(D) ≠ 0 then the correct statement is A)
𝑃(𝐷)
P(C/D) < P(C) B) P(C/D) = C) P(C/D) = P(C) D) P(C/D) ≥ P(C)
𝑃(𝐶)
104.One ticket is selected at random from 50 tickets numbered 00, 01, 02,... 49. Then
probability that the sum of the digits on selected ticket is 8, given that the product of
1 1 5 1
these digits is 0, equals A) B) C) D) [Hint: sum 8 =08,17, 26, 35, 44 product
14 7 14 50
0=00,01…08, 09, 10, 20, 30 ,40]
2 1 2
105.On rolling a die find P (>2/even no.)=? A) B) C) D) none
3 3 5
2 1 2
106.There are 7 cards with red card = 5, and king = 2, Find P(king/red)=? A) B) C) D)
3 3 5
none
107.In class 40% students read mathematics, 25% biology and 15% both biology and math,
one student is select at random, the probability he reads math if it is known that he
reads Biology? A) 2/5 B) 3/5 C) 4/5 D) none
108.In class 40% students read mathematics, 25% biology and 15% both biology and math,
one student is select at random, the probability he reads Biology if it is known that he
reads math? A) 2/5 B) 3/5 C) 4/5 D) none
7
109.For a city population, the probability of selecting i) male or smoker is , ii) male
10
2 2
smoker is , and iii) male, if a smoker is already selected is , find the probability of
5 3
17 | P a g e
3 1 4 3 1
selecting I) non smoker II) male III) a smoker, if a male is first selected. A) , , , B) , ,
5 2 5 7 2
4 3 1 4
, C) , , , D) none
9 7 7 5
110.A bag contains 4 red, 7 green balls another bag contain 8 red and 4 green balls, Bag is
selected at random and single draw of two balls is made, find the probability that one of
82 81 82
them would be red and other green ball? A) B) C) D) none
165 165 164
111.During a survey of road safety, it is found that 60% of accidents occur at night, 52% are
alcohol related and 37% are alcohol-related as well as at night. Find the probability that
an accident i) was alcohol related given that it occurred at night? ii) did not occur at
37 15 37 15 47 15
night given that it was alcohol related? A) , B) , C) , D) none
60 42 60 52 60 42
112.If two dice are thrown together then the probability of getting multiple of 3 on one die
2 1 1
and multiple of 2 on other die is A) B) C) D) none
3 6 3
113.If there are 3 white, 2 black balls in Urn I, & 4 white, 6 black balls in Urn II if one ball is
taken from Urn I & transferred to Urn II & a ball is taken from Urn II then probability that
23 11 88
the ball drawn from urn II is white is A) B) C) D) none
55 44 144
114.Box contains 5 white and 7 black balls, two successive drawn of 3 balls are made i) with
replacement ii) without replacement, the probability that I draw would produce white
balls and second draw would produce black balls A) 6/321, 3/926 B) 1/20, 1/30 C)
35/144, 35/108 D) none
115.A bag contains 4 white, 2 black and 3 yellow, 3 red balls find the probability of getting
7 1 88
White or red ball in a single draw A) B) C) D) none
12 44 144
116.An urn contains 2 red and 1 green balls; another urn contains 2 red and 2 green balls.
An urn was selected at random and then a ball was drawn from it. If it was found to be
red then the probability that it has been drawn from first urn is A) 4/7 B) 3/7 C) 2/3 D)
7/12.
117.3 boxes with following composition, Box-I 5 red, 7 white, 6 blue balls, Box-II 4 red, 8
white, 6 blue balls, Box-III 3 red, 4 white, 2 blue balls, if one ball is drawn at random, find
a chance that would be of same colour? A) 89/729 B) 97/729 C) 82/729 D) 23/729.
118.3 urns contain respectively white, black and red balls. I-1, 2 and 3, II- 2, 1 and 1, III- 4,
5,3. One urn is chosen at random and two balls are drawn, find the probability that it
comes from i) urn I ii) urn II. A) 0.279, 0.466 B) 0.722, 0.664 C) .466, 0.568 D) none
119.Two urns, I urn contains 3 red and 5 black balls II urn contains 4 red and 6 black balls, a
ball is taken at random from the first urn and transferred to second urn, now another
ball is taken from the second urn, find the probability that the second ball would be red?
A) 7/20 B) 35/88 C) 17/22 D) 3/20
120.For a group of students 30%, 40% and 50% failed in physics, chemistry and at least one
of the two subjects respectively. If an examine is selected at random, find the probability
that he passed physics if it is known that failed in chemistry? A) ½ B) 1/3 C) ¼ D) 1/6
121.8 identical balls are placed at random in 3 bags, find the chance that first bag will
contain 3 balls? A) .2732 B) .3256 C) .1924 D) .3443
18 | P a g e
122.X and Y stand in a line with 6 people other people, what is the chance that there are 3
persons between them? A) 1/5 B) 1/6 C) 1/7 D) 1/3
123.A speaks truth 4 out of 5 times. A die is tossed; he reports that there is a 6, find the
4 3 5
chance that actually there were six? A) , B) C) , D) none
9 9 9
124.A company produces scooters in 2 plants (P) I and II, P-I = 70% of scooters and P-II=
30% of scooters, standard scooters produced by P-I=80% and P-II =90%, A scooter is
taken is of standard quality, find the chance it is from P-II? A) 0.325 B) 0.235 C) 0.532 D)
none
125.An insurance company insured 2,000 scooters drivers, 4000 car drivers and 6000 truck
drivers. The probability of accidents is 0.01, 0.03 and 0.15 respectively. One of the
1
insured person met with an accident, find the chance that he is scooter driver? A) , B)
52
3 5
C) , D) none
52 52
1 1 1 1
126.A random variable x = -1, 0, 1, 2 whose respective probabilities are , , , . Compute i)
3 6 6 3
1 5 19 19 19
E(x) ii) E(x+2), iii) E(4x), iv) var(x), v) var(x+4), vi) var(2x) A) , , 2, , , B)
2 2 12 12 3
1 5 19 19 19 1 5 19 19 19
, , 2, , , c) , , 2, , , , D) none.
2 3 12 12 3 2 2 12 12 4
127.Find the expected value of the following probability distribution
X: -20 -10 30 75 80
3 1 1 1 1
P(x=x): , A) 20.5 B) 22.5 C) 21.5 D) 24.5
20 5 2 10 20
128.If X: -2 3 1
P(X): 1/3 ½ 1/6 find E(2x+5)=? And E(X2)=? A) 7,6 B) 8, 9 C) 1,4 D) none
129.If X: -3 -2 -1 0 1
P(X): k 2k 5k 3k k find P(X≤1)=? A) 1 B) 2 C) 3 D) none
130.If E(x) = 10, var (x) = 2, find the positives of a and b such that E (ax-b) = 0and var (x) = 1.
1 1 1
A) , 2 B) ) , 5 C) , 9 D) none
5 7 7
131.The probability of winning of a person is 6/11 and the result he gets Rs 77/- find the
expectation of person? A) Rs 35/- B) Rs 42/- C) Rs 58/- D) none
132.A food item costs Rs 3 and it sell for Rs 4 on the same day. Unsold items are a loss. It is
estimated that its demand can be either 5 or 6 or 7 with probabilities 0.2, 0.7, 0.1
respectively. If a firm stores 6 items, find the expected profit? A) 5.20 B) 5.60 C) 6 D)
none
133.A box contains 12 bulbs of which 3 are defective, 3 bulbs are taken at random, find the
average of defective? A) 0.75 B) 0.5 C) 0.25 D) none
134.If the probability of certain stock will remain the same is 0.46, probability that stock will
increase by Rs 0.50 or 1.00 per share are respectively 0.17 and 0.23, and probability that
its value will decrease by Rs 0.25 per share is 0.14, what is the expected gain per share?
A) 28 paise B) 56 Paise C) 89 paise D) none
135.If a coin is tossed twice, we get, Rs 5 if two heads appear, Rs 2 if one head appear, Rs 1
if no head appear. Then the expected income? A) 3.5 B) 2.5 C) 4 .5 D) 5.5.
19 | P a g e
136.A player tosses 3 coins. He wins Rs. 5 if 3 heads appear, Rs. 3 if two heads appear Rs. 1
if one head appears and a loss of Rs. 15 if no head appear. Find his expected gain in Rs.
A) 0.5 B) 0.25 C) 0.2 D) None
137.Two unbiased dies are thrown then the excepted value of sum on the sides of the die
A) 3.5 B) 7 C) 6 D) 12
5 7 10
138.Find the sum of 2 dice (x ≥ 7) when 2 dice are thrown simultaneously, A) B) C)
12 12 21
D) none
139.The sum of 2 no’s obtained in a single throw of 2 dice is S, then the probability of S will
be maximum when s=? A) 5 B) 7 C)6 D) 8
140.Find the mathematical expectation on rolling a die? A) 3 B) 1 C) 6 D) 3.5
141.Find the mathematical expectation on rolling a 2 dice? A) 7 B) 256 C) 50 D) 0
142.Cumulative distribution function of RV is given by A) F(x) = P(X≤x) B) F(X) = P(X≤x) C) F(x)
= P(X≥x) D) F(x) = P(X=x)
143.A coin is tossed until heads appears, what is the expectation of no. of heads of tosses
required? A) 2 B) 3 C) 4 D)5
144.Unbiased coin tossed 3 times, find the expected value of number of heads? A) 1 B)
2 C) 1.5 D) none
145.Match list I (equality/Inequality) with list II (inference) and select the correct answer
using the codes given below the lists:
List I (equality/Inequality) List II (inference)
A) P (A) + P (B) =1 1. A and B are M.E.E
B) P (A) + P (B) =0 2. A and B are Exhaustive event.
C) P (A) + P (B)  0 3. A and B are Sure events
D) P (A).P (B) =1 4. A and B impossible events.
5. A and B are not equally likely event.
Codes: A B C D
i) 2 1 4 3
ii) 3 1 5 2
iii) 2 4 1 3
iv) 1 3 2 5
146.A random number variable x has the probability distribution
X 1 2 3 4 5 6 7 8
P(x) .15 .23 .12 .10 0.20 0.08 0.07 0.05
147.For the events E= (X is a prime number} and F = (X<4},

X 1 2 3 4 5 6 7 8
P(x) 0.15 0.23 0.12 0.10 0.20 0.08 0.07 0.05
the probability P(E∪F) =? A) .87 B) .77 C) .35 D) .50
148.Find the expected value of the following A) 20.5 B) 21.5 C) 22.5 D) 24.5.
20 | P a g e
X - 20 -10 30 75 80
P(X) 3/20 1/5 ½ 1/10 /20
149.X: 4, 5, 7, 8, 10, P(X=x) 0.15, 0.20, k, 0.15, 0.10. Then the SD of X is A) 3.04 B) 3.04 C)
6.18 D) 1.67
150.If it rains, a taxi driver can earn Rs 100 per day. If it is fair, he can lose Rs 10 per day. If
the probability of rain is 0.4. What is the expectation of earing? A) 23 B) 34 C) 35
D) none
151.The probability is 0.99 that a 30-year-old man will survive one year more. Insurance
company officers to sell such a man a Rs 10, 000 one-year term life insurance policy at a
premium of Rs 110. What is the insurance company’s expected gain? A) 14 B) 12 C) 10
D) none.
152.There are 1000 tickets in a lottery. The purchase price of the ticket is Rs 2 per ticket.
Out of these 1000 tickets only two tickets bear the price of Rs 500 each. A person
purchased 2 tickets, find his expected Amount? A) 7 B) 2 C)-2 D) none
153.An urn contains 4 white and 2 black balls. A person selects 3 balls at random and he
receives Rs 10 for each black ball and he has to pay Rs 7 for each white ball. What is the
expected amount gained by the person? A) 4 B) -4 C) 5 D) -5
154.A bag contains 6 white and 4 red balls, if a person draws 2 balls and receive Rs 10 and
Rs 20 for a white and red balls respectively, then his expected amount is A) 170 B) 176 C)
178 D)180
155.A packet of 10 electric components is known to include 3 defectives, if 4 components
are selected from the pocket at random what is the expected value of the number of
defective? A) 1.2 B) 1.21 C) 1.69 D) 1.72
156.The probability that there is at least 1 error in an account statement prepared by 3
students A, B and C are 0.2, 0.3 and 0.1 in the respective 60, 70 and 90 of such
statement. Find an expected number of correct statements? A) 170 B) 176 C) 178 D) 180
157.A random variable X takes three values -1,2,3, with the respective probabilities P (-1)=
1/3,P (2)=1/3, P(3)=1/3, then is A) 3/2 B) -5/2 C) 2 D) 9/2
158.Let the distribution function of a random variable X be F(x) = P(X <x) then F(5)-F(2), a)
P(2 <x<5) b) P(2<x <5) c) P(2 <x <5) d) P(2<x<5)
159.The probability density function of a continuous random variable is defined as 𝑓(𝑥) =
1
𝑐, −1 ≤ 𝑥 ≤ 1. The value of c is a) 1 b) – 1c) d) 0.
2
1
160.A continuous random variable has a probability density function 𝑓(𝑥) = − 𝑎𝑥, 0 ≤
2
𝑥 ≤ 4. The value of a is a) 1/8 b) 7/8 c) 3/16 d) none
161.A continuous random variable has a probability density function 𝑓(𝑥) = 𝐾(𝑥 − 1), 1 ≤
𝑥 ≤ 2. The value of k is a) -1 b) 1 c) 2 d) 0
1 𝑛−1 𝑛+1 𝑛
162.F(x) = then mean is A) B) C) D) none
𝑛 2 2 2
Theoretical Distribution:
21 | P a g e
Expected frequencies can be calculated using mathematical tools without conducting
any statistical experiment. Such of those distributions are called theoretical distribution.
1. Binomial distribution. 2. Poisson distribution. 3. Normal distribution.
Binomial Distribution (Repeated Trails)
Bernoulli’s Distribution: -
If the distribution having i) fixed trials ii) No. of success(p) iii) No of failure(q) then
the distribution is called Binomial distribution & It was named by James Bernoulli’s in the 17th
century.
Suppose an experiment repeats for finite number of times say (n) q.p.p…..q….p.q ----- (1)
(From the above why p, q are multiplied? Success doesn’t influence in the failure.They are
independent to each other)
Separate p & q are from (1), also we do not know, how many successes are there?
Let it be ‘ x ’  p.p….p.q.q………q (using Multiplication theorem)
𝑝 𝑥 𝑞 𝑛−𝑥 In n – trials there would be x – success & (n- x ) failure in 𝑛𝐶𝑥 ways.
 p[ x times of success in n- independent trials] us denoted by
𝑃(𝑥 = 𝑥) = 𝑛𝐶𝑥 ∙ 𝑝 𝑥 ∙ 𝑞 𝑛−𝑥
n – Number of trials, p – Constant probability, q= 1-p (p + q = 1,), x = number of success ( x =
0, 1…n)
x 0 1 ………. ….. n TOTAL
p (x ) 𝑞 𝑛 𝑞 𝑛−1 𝑛𝐶𝑥 ∙ 𝑝 𝑥 …….. 𝑝𝑛 (𝑞 + 𝑝)𝑛
∙ 𝑞 𝑛−𝑥
Properties of Binomial distribution:
✓ Parameters of B.D are n, p or B(n, P) (bi-parameretic-discrete)
✓ Binomial distribution is always on form (𝑞 + 𝑝)𝑛
✓ Binomial distribution is always discrete probability distribution ( x = 0, 1, 2….n)
✓ The probability that there x - success in n – Independent trials is given by
𝑛𝐶𝑥 ∙ 𝑝 𝑥 ∙ 𝑞 𝑛−𝑥 , for N- Such sets is theoretical frequency is given by
𝑁 ∙ 𝑛𝐶𝑥 ∙ 𝑝 𝑥 ∙ 𝑞 𝑛−𝑥 , ( x = 0, 1, ….. n)
Success – p is always constant (fixed). q= 1-p, x =no of success.
✓ Mean of Binomial Distribution 𝜇=np (i.e) E( x ) = m = Avg = np
✓ S.D of Binomial Distribution (B.D) 𝜎 = √𝑛𝑝𝑞 or variance σ2 =npq
22 | P a g e
✓ In Binomial distribution 𝑚 > 𝜎 2 (always). (for np>npq, 0<q<1)
✓ First moment about mean 𝜇1 =0
✓ Second moment about mean 𝜇2 = 𝑛𝑝𝑞
✓ Thrid moment about mean 𝜇3 = 𝑛𝑝𝑞(𝑞 − 𝑝)
✓ Fourth moment about mean 𝜇4 = 3𝑛2 𝑝2 𝑞 2 + (1 − 6𝑝𝑞)𝑝𝑞
(𝑞−𝑝)2 𝑞−𝑝
✓ Moment coeffcient of skewness 𝛽1 = ,𝛾1 =
𝑛𝑝𝑞 √𝑛𝑝𝑞
1−6𝑝𝑞 1−6𝑞𝑝
✓ Moment coeffcient of kurtosis 𝛽2 = 3 + ,𝛾2 =
𝑛𝑝𝑞 𝑛𝑝𝑞
1
✓ 𝑝 = 𝑞 = Then the binomial distribution becomes symmetrically normal, (take 𝑝 =
2
1
𝑞 = in 𝛽1 = 0, no skewness, therefore normal)
2
1
✓ If 𝑝 ≠ , then Binomial distribution is skewed,
2
1 1
✓ Then P < then it is positively skewed (𝛾1 > 0, then q-p>0 or 1-2p>0 or P < and
2 2
1
✓ if P> it is negatively skewed.
2
𝑛
✓ If p = 0.5 then only maximum value variance can be found out &max.variance = (take
4
1
𝑝 = 𝑞 = , in varience.
2
✓ Mode = (n+1) p , if mode is decimal then it is unimodal, otherwise bi-modal for integer.
1
✓ If 𝑝 = 𝑞 = , then mean=mode
2
✓ B.D is derived from method of moments.
Example: If the result is 6.7243 then the integer part 6 represents Mode binomial
distribution have only one mode.
Example: If the result is integer say “5” (4 and 5) then Binomial distribution has got 2 modes.
(It depends on parameter n & p)
Problems
1.Theoretical distribution A) exist in real life B) only in theory C) A and B D) none
2.Probability distribution may be A) discrete B) continuous C) infinite D) A or B
23 | P a g e
3.An important discrete probability distribution is A) BD B) PD C)ND D) none
4.An important continuous probability distribution is A) BD B) PD C)ND D) none
5.Parameter is a characteristic of a) population b) sample c) probability distribution d) a)
& b)
6.Example of parameter A) sample mean B) Population mean C) BD D) n
7.Binomial Distribution is …………………..A) continuous B) cannot be said C) discrete
8.An example of bi-parametric discrete distribution A) BD B) PD C)ND D) none
9.Results of ODI matches b/w India and Pakistan A) BD B) PD C)ND D) noneTrail is an
attempt to A) make something possible B) make something impossible C) prosecute an
offender in a court of law D) produce an outcome which is neither certain nor
impossible
10.The important characteristic of BD A) each trail is associated with two outcomes B)
trails are independent C) trails are infinite D) A and B
11.The probability mass function of BD is A) 𝑛𝐶𝑥 ∙ 𝑝 𝑥 ∙ 𝑞 𝑛−𝑥 B) 𝑛𝐶𝑥 ∙ 𝑞 𝑥 ∙ 𝑝𝑛−𝑥 C) 𝑝 𝑥 ∙
𝑞 𝑛−𝑥 D) none
12.If X is a BD with parameter n and p then x can assume A) any value b/w 0 to n B) any
value b/w 0 to n both inclusive C) any whole number b/w 0 to n, both inclusive D) any
value b/w 0 to ∞
13.If x is a binomial variate it can take value A) −  to  B) Natural No’s C) Real No’s D)
whole number with finite terms
14.In a binomial distribution with parameters n & p, X assumes values between a) 0 & n b)
0 & n both inclusive c) between 0, 1 d) between 0, ∞.
15.𝑥̅ , 𝜎 2 of binomial distribution is depend on A) p & q B) n C) p D) B&C both
16.The 𝑥̅ , 𝜎 2 of binomial distributions are A) np, npq B) none C) both
17.Binomial distribution is A) Uni – modal B) Bi – modal C) a or b
n n
18.The variance of Binomial distribution is A)  B)  C) <4n D) none
4 4
19.SD of BD is A) np B) npq C) √𝑛𝑝𝑞 D) none
20.Variance of BD A) √𝑛𝑝(1 − 𝑝) B) n(1-q)q C) √𝑛𝑝𝑞 D) none
21.For Binomial Distribution a) Variance < Mean b) Variance > Mean c) Variance =
Mean.
22.If mean > variance, the distribution is A) BD B) PD C) ND D) none
23.For BD mean and mode A) never equal B) equal at q=0.5 C) always equal D) do not
exist
1
24.In Binomial distribution 𝑥̅ 𝑎𝑛𝑑𝑍 are equal A) True B) p = 0.5 C) false D)𝑞 =
5
25.The method usually applied for fitting a binomial distribution is known as a) method of
probability distribution b) method of deviations c) method of moments d) method of
least squares.
26.What is SD of number of recoveries among 48 patients when the probability of
recovering is 0.75? A) 36 B) 81 C) 9 D) 3
27.If x is BV, what is the mean of x if X is symmetric? A) 5 B) 10 C) 2 D) 8
24 | P a g e
28.If X~B(n, p), what is the greatest value of variance of X if n=16? A) 2 B) 4 C) 8 D) √5
29.The max.variance of Binomial distribution = 3.5 find the Binomial distribution? A) 1 B)
2 C) 3 D) none.
30.In Binomial Distribution, μ = 4 and 𝜎 2 = 3 then mode =? A) 4 b) 4.25c) 4.5 d) 4.1
1
31.Parameters of BD are 15, mode=? A) 5 B) 5,4 C) 5.5 D) 6
3
2 2 1 1
32.In BD if σ = mean , then n,p are A) 1, B) 1, 1 C) 1, D) none
2 2
33.In BD, X~B(n, p) and Y= n-x, follows A) B(n,1) B) B(n,X) C) B(n,p) D) B(n,q)
1 2 1
34.An experimental succeeds twice as of as it fails, find p=? A) B) C) D) none
5 3 5
35.An experimental succeeds twice as of as it fails. 5 experiments are conducted, find the
probability that 3 of them succeeds? A) 0.3292 B) .2929 C) .9292 D) none
36.An experiment succeeds thrice as often it fails. If the experiment is repeated for 5
1 5 3 5 1 5
times. What the probability of none is succeeded? A)( ) B) ( ) C) ( ) D) none
4 4 3
37.In a binomial distribution mean is K times the variance then what is the value of K =?
1 1
A) p B) C) D) 0
𝑝 1−𝑝
1 1 10
38.For a binomial distribution𝐵(6, 𝑝), 𝑃(𝑋 = 2) = 9 𝑃(𝑋 = 4), then p is A) B) C)
4 3 13
D) none.
1
39.For a binomial distribution, n=6, p= ,𝐾 ∙ 𝑃(𝑋 = 4) = 𝑃(𝑋 = 2), then k=? is A) 4 B) 5
3
C)6 D) none.
1 1 1
40.In BD mean=3, 𝑆𝐷=1, find q=? A) A) B) C) D) 12
2 3 4
41.In BD mean=3, 𝑆𝐷=1.5, find n=? A) A) 2 B)4 C) 8 D) 12
1 1 10
42.In BD mean=6, 𝜎 2 =3, find p=? A) A) B) C) D) none
2 3 13
2 1
43.Mean of a binomial distribution is 6 and variance is 2. Find P? a) B) c) 1 d)
3 3
none
3 76 723
44.Mean & variance of a BD are 4 and respectively. Find P(x≥1)=? A) B) C) 1 D) 0
4 729 729
45.If x ~ B (5, p) and p (x = 2) = 0.4362 and p (x = 3) = 0.2181 then p = ? a) ¾ b) 1/3 c) 2/3
d) 1/4
2 1 9 2 1 5
46.The binomial distribution with mean 3 and variance 2 is=? A)( + ) B) ( + ) C)
3 3 3 3
2 1 9
(3 + 3)
47.The mean of binomial distribution is 20 and S.D = 4 then a) n = 100, p = 1/5, q = 4/5, b)
n = 50, p = 2/5, q = 2/5 c) n = 100, p = 3/5, q = 4/5, d) n = 100, p = 3/5, q = 1/5.
1
48.In B.D. n=9, p = . What is value of 𝜎 2 = ? a) 8 b) 4 c) 2 d) 6
3
4
49.In BD E(X) =2, var(x)= , find n=? A) 7 B) 6 C)8 D)9
3
50.The parameters of Binomial distribution are (10, 0.6). Find𝑥̅ , 𝜎, 𝜎 2 , C.V, (+ or -)
skewed, Mode, p(0), 𝑝(𝑥 ≥ 1) =? A) 6, 1.54, 2.4, 25.66, - skewed , 6.6, (0.4)10, 1-
25 | P a g e
(0.4)10 B) 6, 1.54, 2.4, 25.66, + skewed, 6.6, (0.4)10, 1-(0.4)10 C) 6, 1.8, 2.4, 25.66,
symmetric, 6.6, (0.4)10, 1-(0.4)10 D) none.
51.The Binomial distribution is of (0.8 + 0.2)16 , Find the parameter, 𝑥̅ , 𝜎, 𝜎 2 , C.V,test of
skewness, p(x=0), p(non-zero success)=?A) 16, 0.2, 3.2, 1.6, 2.56, 50%, +, (0.8)16, 1-
(0.8) 16 B) 16, 0.2, 3.2, 1.6, 2.56, 50%, +, (0.8)16, 1-(0.8) 15 C) 16, 0.2, 3.2, 1.6, 2.56, 50%,
-, (0.8)16, 1-(0.8) 16 D)none
1
52.The parameter of Binomial distribution is (16, ),find C.V, Max.variance, Mode? A) 25,
2
4, 8 B) 27, 4, 8 C) 25, 4, 8 D) none.
53.If overall pass percentage of success in an exam is 60, find the chance that out of a
group of 4 students at least 1 pass? A) 0.6535 B) 0.9744 C) .8704 D) 0.0256
54.What is the probability of making 3 correct guesses in 5 true or false answer type
questions? A) 0.3125 B) 0.158 C) 0.15 D) 0.144
55.Find the probability of getting 3 heads if 6 unbiased coin is tossed simultaneously? A)
0.5 B) 0.25 C) 0.3125 D) 0.6875
56.It is known that the chance of missile hitting target is 1/8, find a chance out of 10
missiles fired at least 2 will hit a target? A) .42 B) .39 C) .52 D) .36
57.If X is binomial variable so that 2 P(X=2) = P(X=3) and mean of X is known to be 10/3
find a chance that X assume at most that value 2? A) 16/81 B) 17/81 C) 47/243 D)
none
58.Assuming one-third of the population are tea drinkers and each of 1000 enumerators
takes a sample of 8 individuals to find out whether they are tea drinkers or not, find
how many enumerators are expected to report that five or more people are tea
drinkers? A) 100 B) 95 C) 88 D) 90
59.Out of 128 families with 4 children each, how many are expected to have at least one
boy and one girl? A) 100 B) 105 C) 108 D) 112
60.80% of T.V. viewers like “Grand Masters”. A sample of 5 viewers is taken at random.
What is the probability the above viewers like a same programme? A) 5C4 (0.8)4(0.2)
B) 6C4 (0.8)4(0.2) C) 7C4 (0.8)4(0.2) D) none
61.Out of 10 independent rolling of a biased die, the chance that an even number will
appear 5 times is twice the chance that an even number will appear 4 times. Find the
chance that even number will appear twice when die is rolled 8 times? A) 0.0304 B0
0.121 C) 0.23 D) 0.19
1
62.In B.D, p= and n=400, find mean, varience, moment coefficient of skewness and
10
2 23 4 23 5 23
kurtosis? A) 40, 36, , B) 40, 36, , C) 40, 36, , D) none
15 1800 15 1800 15 1800
63.The probability that a student is not a swimmer is 1/5, then the probability that out of
4 51 1 54 4 51
five students four are swimmer is (a) ( ) (b) 5C1( ) (c) 5C4( ) (d) None
5 5 5 5 5 5
Poisson distribution: (P.D)

26 | P a g e
It is discrete probability distribution like binomial
(i.e) Random variables x takes the values 0, 1…n...∞.
It was discovered by a French Mathematician Simen Denis Poisson in 1837
It is limiting case of Binomial Distribution
As n is very large 𝑛 → ∞ , p is very small p→ 0 and np is finite quantity
Examples of Poisson distribution:
• The number of cars passing through a certain street in a time “t”
• The number of deaths in a city in one year by rare diseases.
• The number of defective screws per box of 100 screws.
• The number of suicides or death by any diseases in time t.
• The number of printing mistake in each page of the Ist proof of a book.
• The emission of radioactive particles.
• The number of air accidents in India in one year.
• The number of telephone call received at a particular telephone exchange
• The number of defects or scratches on a sheet of glass or a piece of furniture.
Definition:
The probability distribution of a random variable (RV) is said to be have a Poisson
distribution if it takes only one non – negative values & its distribution is given by
𝑒 −𝑚 𝑚 𝑥
𝑝(𝑥) = 𝑃(𝑋 = 𝑥) = , 𝑥 = 0, 1, 2, …
𝑥!
Where m = mean, n= number of trials, x= required number of success,
e = 2.7142 (transcendental number)
𝑒 −𝑚 𝑚𝑥
For theoretical frequency N. , Where N – Number of trails
𝑥!
Assumption on Poisson distribution:

➢ The occurrence or non-occurrence of an event does not influence the same.
➢ The probability of success for a short time interval or a small space is
proportional to the length of the time interval or space as the case may be
➢ The probability of the happening of more than one event in a very small interval
is negligible.
Properties of Poisson distribution:
✓ Mean = 𝜇 =np=m
27 | P a g e
✓ Variance = np=𝜎 2
✓ Standard Deviation = 𝜎 = √𝑛𝑝
✓ In Poisson distribution Mean = Variance 𝑥̅ = 𝜎 2

✓ First moment about mean 𝜇1 = 0
✓ Second moment about mean 𝜇2 = 𝑚
✓ Third moment about mean 𝜇3 = 𝑚
✓ Fourth moment about mean 𝜇4 = 𝑚 + 3𝑚2
1 1
✓ Moment coefficient of skewness 𝛽1 = and 𝛾1 =
𝑚 √𝑚
1 1
✓ Moment coefficient of kurtosis 𝛽2 = 3 + and 𝛾2 =
𝑚 𝑚
✓ Parameter is Mean or Expectation or average.

✓ Happening of one event does not affect the happening of the other words. ( Statistical
Independence)
𝑒 −𝑚 𝑚0
✓ In Poisson Distribution Probability (‘0’ success) i.e. 𝑃(𝑥 = 0) = ,
0!
✓ Probability (non – zero success or at least one success) is given by 𝑃(𝑥 ≥ 1) = 1 − 𝑒 −𝑚
100
✓ Coefficient of variation of Poisson distribution =
√𝑚
✓ Poisson distribution is always positively skewed.

✓ Mode is same as BD.
RECURSIVE RELATION:-
In Poisson distribution, the probability of 2 consecutive success are equal, the higher
value of x is Mean.
If p(2) = p(3), then m = 3
p (10) = p(11), then m = 11
p (9) = p(8), then m = 9
p (n-1) = p(n-2), then m = n-1
p (n+1) = p(n-1), cannot be said  There is a gap in continuation.
28 | P a g e
Problems:
1.Which one is not a condition of Poisson model A) the probability of having success in a
small time is constant B) the probability of having > 1 success in a small time is very
small C) the probability of having success in a small time is independent of time and
also earlier success D) the probability of having success in a small time (t, t+dt) is kt for
positive constant k.
2.In ......... distribution, mean = variance. A) BD B) PD C)ND D) none
3.Which one is uniparametric distribution A) BD B) PD C)ND D) none
4.For PD A) mean= variance B) mean ≠ variance C) SD= mean D) B or C
5.Poisson distribution A) unimodal B) bimodal C) multi modal D) A or B
6.A binomial distribution with parameters n and p can be approximated by PD with
parameter m = np is A) 𝑛 → ∞ B) 𝑝 → 0 C) both A and B D) 𝑛 → ∞, 𝑝 → 0 and np is
finite
7.For Poisson fitting to an observed frequency distribution we equate passion parameter
to the A) mean B) median C) mode D) none
8.Number of misprints per page follows A) BD B) PD C)ND D) none
9.Poisson distribution with ----- Occurs of events A) rare B) often C) both
10.Poisson distribution is ----distribution A) Discrete B) Continuous C) Discontinuous D)
none
11.Poisson distribution ------skewed. A) Negatively B) positively C) arbitrarily D) none
12.If parameters of a binomial distribution are n and p then this distribution tends to a
Poisson distribution when A)𝑛 → ∞, 𝑝 → 0 , np finite B)𝑛 → ∞, 𝑝 → 0 C) 𝑛 → ∞, 𝑝 →
1 D) none
13.In Poisson Distribution probability of success is very close to A) 1 B) -1 C) 0 D) none
14.If X is Poisson variate with P(x=0) = P(x=1) then P(x=2) =? A) 1/6e B) e/6 C) 1/2e D) 0
15.In a Poisson distribution 𝑃(𝑋 = 1) = 𝑃(𝑋 = 2). find mean? A) 1 B) 1.5 C) 2.5 D) 2
16.In a Poisson distribution 𝑃(𝑋 = 8) = 𝑃(𝑋 = 7). find mean? A) 1 B) 8 C) 2.5 D) 2
17.In a Poisson distribution 𝑃(𝑋 = 4) = 𝑃(𝑋 = 5). find parameter? A) 4 B) 5 C) 2.5 D) 2
18.For a Poisson distribution,𝑃(𝑋 = 3) = 5 𝑃(𝑋 = 5), SD= ? A) 4 B) 2 C) 16 D) √2
𝑒 −1
19.If x is a Poisson variate and E (x) = 1 then P(x>1) is A) 1 − B) 1-2e-1C) 1-e-1 D) none
2
20.For a Poisson variate the variance is 3 then the S.D is? a) =3 b) =√3 c) 9 d) none
21.If a random variable x follows Poisson distribution such that E(x2) = 30, then the
variance of the distribution is a) 7 b) 5 c) 30 d) 20
22.If SD of Poisson variable X is 2, find P(1.5<X<2.9)=? A) 0.231 B) 0.158 C) 0.15 D) 0.144
23.If the mean of PD is 2 find P (X=takes values at least 1) =? A) 0.456 b) 0.821 C)0.632 D)
0.254
24.If X~P(m) and CV is 50, find the probability that X would assume only non-zero value?
A) 0.018 B) 0.982 C) 0.989 D) 0.976
29 | P a g e
25.If 1.5% of items produced by a manufacturing unit are known to be defective, find the
probability that a sample of 200 items would contain no defective? A) 0.05 B) 0.15 C)
0.20 D) 0.22
26.If 1% pf an airline flights suffer with minor equipment failure in an aircraft find the
chance that there will be exactly 2 failure in next 100 flights? A) 0.5 B) 0.184 C) 0.265
D) 0.256
27.The number of calls arriving at an interval switch board of an office is 96 per hour. Find
the probability that there will be 1) not > than 3 calls on the board 2) at least 3 calls in
a minute Given e-1.6 = 0.2019 A) 0.08 and 0.92 B) 0.19 and 0.92 C) 0.92 and 0.13 D)
0.92 and 0.08.
28.A manufacturer who produces medicine bottles finds that 0.1% of the bottles are
defective. The bottle is packed in boxes containing 500 bottles. A drug manufacturer
buys 100 boxes from the producer of bottles. Using Poisson distribution find how
many boxes will contains at least two defectives? (e-0.5= 0.6065) A) 7 B) 13 C) 9 D)11.
29.If 5% of families in Kolkata do not use gas as a fuel what will be the probability of
selecting 10 families in a random sample of 100 families who do not use gas fuel? (e-
5
= 0.0067) A) 0.038 B) 0.028 C) 0.048 D) 0.018
30.A book has 125 misprints distributed at random throughout its 125 pages. What is the
probability that page observed at random contains at least two misprints? A) .2642 B)
2462 C) 2624 D) none
31.In a certain manufacturing process 5% of the tools produced turn out to be defective.
Find the probability that in a sample of 40 tools; at most 2 will be defective? e-2 =
0.135 A) 0.555 B) 0.932 C) 0.785 D) 0.675
32.The probability that a man aged 45 will die within year is 0.012. What is the probability
that of 10 men, at least 9 will reach their 46th birth day? e-0.12 = 0.88692 A) 0.0935 B)
0.9934 C) 0.9335 D) 0.9555
33.A car hire firm has 2 cars which is hired every day, number of demands per day follows
PD with mean 1.20, find the proportion of days on which some demand refuses?( e-1.2
=3.32) A) 0.25 B) 0.3012 C) 0.12 D) 0.03
34.Number of accidents in a year attributed to taxi driver follows PD with average 2, out
of 500 taxi drivers of that area, find an number of drivers with at least 3 accidents in a
year(e-2 = 0.135) A) 162 B) 180 C)201 D) 190
35.If SD of Poisson is 2 then mode is A) 2 B) 4 C) 3 and 4 D) 4 and 5.
In a Poisson distribution a) Mean & SD are equal b) Mean, variance are equal c) SD &
variance are equal d) both (a) and (b)
2 1
36.In a Poisson distribution, 𝜇4 = 2, 𝜇2 =? A) 2 B) 4 C) D)
3 3
37.For a Poisson variate X, P(X=2) = 3P (X = 4), then the standard deviation of X is (a) 2 (b)
3 (c) 4 (d)√2
38.In a certain Poisson frequency distribution, the probability corresponding to two
successes is half of the probability corresponding to three successes. The mean of the
distribution is a) 6 b) 12 c) 3 d) 2.95
30 | P a g e
39.If x is a Poisson variate if the probability of non – zero positive success is given by
1 − e −6 .5 .
40.Find the mode=? A) 6 B) 15 C) 9 D) none.
41.The coefficient of variation of Poisson distribution is 20%. Find the parameter, mode,
p( x = 0), ,p(at least 1 success) = ? A) 25, 25, 24, e-25, 1- e-25 B) 25, 24, 25 250000, e-
250000
, 1- e-250000C)25, 26, 25, 250000, e-250000, 1- e-250000
42.If x is PD with 9P(x=4) +90P(x=6) = P(X=2). Find P(X=1) ? A) 0.5655 B) 0.655 C) 0.73
D)0.82
43.A R.V follows PD with CV=50, find P(X>1 / X>0)= ? A) 0.1876 B) .2341 C ).9254 D) .8201
44.P.D with mean 2. Then find the 𝑝(𝑥 ≤ 2/ 𝑥 ≥ 1) =? A) .6261 B ) .2612 C) 2145 D)
none
Normal Distribution (N.D):
The most important continuous probability distribution used in the entire field of statistics.
The mathematical equation of normal curve was found by De-moivre in 1733. It was later
rediscovered by French mathematician Laplace (1749- 1827). It is referred as Gaussian
distribution.
Definition:
The Probability Mass Function of normal distribution is
1 1 𝑥−𝑚 2
− ( )
𝑓(𝑥) = 𝑒 2 𝜎 , −∞ < 𝑥 < ∞
𝜎√2𝜋
Remark:
It is Limiting form of Binomial distribution since when n → ∞ neither p nor q are not too
small.
It is limiting form of Poisson distribution when its μ mean is very large.
 x values falls in the interval ( Real line) whose range is −∞ < 𝑥 < ∞.
Properties of Normal Distribution:

✓ It is bell shaped.
✓ It is symmetric.
✓ Mean = Median = Mode.
✓ AB refers ordinate of normal curve.
✓ It divides into 2 equal parts.
✓ Area of Full normal curve=1.
✓ Area of L.H.S = 0.5(negative).
✓ Area of R.H.S = 0.5 (positive).
✓ The minimum value of z = -3 & maximum value of z = 3.
✓ There is no skewness (degree of symmetry).
31 | P a g e
✓ This normal distribution has got only one mode or uni-modal.
✓ It has 2 parameter mean (𝜇𝑜𝑟𝑥̅ , 𝑜𝑟𝑚) &varience(𝜎 2 )
✓ It is denoted by N(𝑚, 𝜎 2 ).
✓ If x and y are independent variables 𝑥 = 𝑁(𝜇1 , 𝜎12 ) ,𝑦 = 𝑁(𝜇2 , 𝜎22 ),
z= x+y=N (𝜇1 + 𝜇2 , 𝜎12 + 𝜎22 )
✓ First moment about mean 𝜇1 = 0
✓ Second moment about mean 𝜇2 = 𝜎 2
✓ Third moment about mean 𝜇3 = 0 (no skewness = symmetry)
✓ Fourth moment about mean 𝜇4 = 3𝜎 4
(𝜇 )2
✓ Moment coefficient of skewness 𝛽1 = (𝜇3)3 = 0
2
𝜇 3𝜎 4
✓ Moment coefficient of kurtosis 𝛽2 = (𝜇 4)2 = =3
2 𝜎4
✓ Mean deviation about 𝑥̅ = 0.8𝜎

✓ Quartile deviation = 0.675𝜎
✓ Lower quartile = 𝑚 − 0.675𝜎
✓ Upper quartile =𝑚 + 0.675𝜎
✓ Point of inflexion =𝑚 − 𝜎, 𝑚 + 𝜎
✓ Always lower quartile and upper quartile are equidistant from Mean (𝜇𝑜𝑟𝑥̅ , 𝑜𝑟𝑚)
✓ The tail of the normal curve never touch the horizontal line tails are asymptotic
✓ In statistical quality control, the properties of normal distribution are used to derive the
control limits.
✓ Empirical Rule.
68.27% of the observations fall within 1 SD of the mean, b/w µ-and µ+σ
95.44% of the observations fall wihin2 SD of the mean, b/w µ-2σ and µ+2σ
99.73% of the observations fall within 3 SD of the mean, B/w µ-3σ and µ+3σ .
Standard normal variate: (s.n.v)

Always mean = 0 and varience =1
32 | P a g e
Area under standard normal curve (z):
𝑥−𝑚
𝑍= ,
𝜎
𝑋 → 𝑧 → 𝑃,
𝑅. 𝑉 → 𝑠. 𝑛. 𝑣 → 𝑃𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑖𝑙𝑡𝑦
(−∞, ∞) → (−3, 3) → [0, 1]
Problems:
(𝑥 – 𝜇)2
1 −
1.The probability density function of a normal variable X is A) a)𝑓(𝑥) = 𝑒 2𝜎 2 ,
𝜎 √2𝜋
(𝑥 – 𝜇)2
1 −
0 < 𝑥 < ∞ , b) 𝑓(𝑥) = 𝑒 2𝜎 2 , −∞ < 𝑥 < ∞ C) c) 𝑓(𝑥) =
√2𝜋𝜎
(𝑥 – 𝜇)2
1 −
𝑒 2𝜎 2 , −∞ < 𝑥 < ∞ D) none
𝜎 √2𝜋
2.Normal distribution is … A) Discrete B) continuous C) symmetrical D) None
3.Normal Distribution is … A) Uni – parametric B) Bi – parametric C) Both D) None
4.Normal distribution is …A) Uni – model B) Bi – model C) Some times D) None
5.Normal Distribution is … A) positively skewed B) Negatively skewed C) symmetrical D)
None
6.The tails of Normal curve ----- horizontal axis A) touches B) never touch C) partly touch
D) None
7.Area of Normal curve from −   x   is A) 1 B) 5 C) 0 D) -0.5
8.If X ~ N(𝑚, 𝜎 2 ), then which of the following is true a) MD = 0.8σ b) QD = 0.675 σ c)
Both a) and b) d) None
9.Mean and mode of ND A) equal B) always equal C) different D) none
10.Mean deviation about median of standard normal variate A) 0.675𝜎 B) 0.675 C) 0.8𝜎
D) 0.8
11.For standard normal variate, point of inflexion is A) m-𝜎 , m+𝜎 B) −𝜎, 𝜎 C) -1, 1 D0
none
12.Symbol 𝜑(𝑎) indicated the area of s.n.v b/w A) 0 to a B) a to ∞ C) -∞ to a D) -∞, ∞
13.The area of s.n.v b/w z=0 to z=1 is 0.3413, then value of 𝜑(1) is A) 0.5 B) 0.8413 C) 0.3
D) 1
14.QD of ND with mean and SD 4 is A) 0.675𝜎 B) 0.675 C) 0.8𝜎 D) 2.7
15.The total area under normal curve is A) 1 B) 0 C) 0.5 D) -1
16.In the ND P (m-3𝜎< x <m+ 3𝜎) is equal to A) 0.9973 B) 0.9546 c) 0.9899 d) 0.9788
17.The interval (𝜇 − 3𝜎, 𝜇 + 3𝜎 )covers A) 95% area of ND B) 96% area of ND C) 94%
area of ND D) All but 0.27% area of ND.
18.Area between -1.96 to +1.96 in ND A) 95.45% B) 95% C) 96% D) 99%
𝑥
19.If x and y are two independent standard normal variables, then the distribution of is
𝑦
A) N.D B) exponential distribution C) Cauchy’s Distribution D) Binomial distribution
20.In a ND the relation between QD and SD is ______A) 3 QD = 2 SD B) 3 SD = 2 QD C) 4
QD = 3 SD
33 | P a g e
21.Which of the following is false in case of ND A) It is multi model B) mean = median =
modeC) It is symmetric D) Total area is 1.
22.In normal distribution the relation between Q.D, S.D is A) Q.D > S.D B) Q.D < S.D C) Q.D
= S.D
23.Variance of Standard Normal Distribution? A) 1 B) σ C) 2 D) 0.
(𝑥 – 10 )2
−
𝑒 32
24.find CV for the following P.D.F, P(x=x) = ; −∞ < 𝑋 < ∞A) 50 B) 60 C)
4√2𝜋
40 D) 30
25.The mean and variance of a random variable x having the following P.D.F,
2
𝑒 − (𝑥 – 4 ) 1 1
26.P(x=x) = ; −∞ < 𝑋 < ∞ A) 4, B) 4, C) 4, 8 D) none
√𝜋 √2 2
1 2
− (𝑥 – 45 )
𝑒 200
27.The p.d.f is given by f(x) = ; −∞ < 𝑋 < ∞.find the point of inflexion A)
√200𝜋
(55 and 35) B) 35, 55 C) both and B D) none
1 2
− (𝑥 – 10 )
𝑒 50
28.The following normal distribution is 𝑓(𝑥) = A ) 10, 25 B )25, 10 C) 50, 10
√50𝜋
D) none
1 2
− (𝑥 – 10 )
𝑒 10
29.The probability mass function Normal distribution is 𝑓(𝑥) = parameters
√10𝜋
are? A ) 10, √5B )25, 5 C) 50, 10 D) none.
1
(𝑥 – 15 )2 1 1 1
30.If 𝑓(𝑥) = 𝑘 ∙ 𝑒 − 50 Find k? A ) B) C) D) none
√50𝜋 √70𝜋 √80𝜋
1
1 (𝑥 2 −6𝑥+9 )2
31.𝑓(𝑥) = 𝑒 − 8 Find𝑚, 𝜎, k =? A )3, ±2, √8𝜋B )3, ±2, √7𝜋 C) 3, ±2, √5𝜋
𝑘
D) none
2
𝑒 − 25𝑥 1 1 1
32.𝑓(𝑥) = Find the parameters? A )0, B ) 0, C) 0, D) none.
√𝜋 50 70 90
−200𝑥 2 1 1
33.𝑓(𝑥) = 𝑘 ∙ 𝑒 Find the parameters and also find k=? A) A ) 0, , B
400 20√𝜋
1 1 1 1
) 0, , C) 0, , D) none
700 40√𝜋 900 70√𝜋
1
− (𝑥 – 10 )2
𝑒 72
34.𝑓(𝑥) = , Find the parameters, M.D, Q.D, C.V=? A) (10, 36), 4.8, 4.020, 60 B)
√72𝜋
(10, 34), 4.8, 4.020, 60 C) (10, 35), 4.8, 4.020, 60 D) none.
35.If for a normal distribution Q1= 54.52 and Q3 = 78.86, then the median of the
distribution is
36.a)12.17 b) 66.69 c) 39.43 d) None
37.if two quartiles are 14.6, 25.4 find SD ? A) 9 B0 5 C) 10 D) 8
38.if MD of normal variate is 16, find QD? A) 10 B) 13.5 C)15 D) 12.05
39.if point of inflexion of normal curve are 40 and 60 respectively, then MD? A) 40 B) 45
C) 50 D0 60
40.if QD of normal curve is 4.05, MD=? A) 5.26 B) 6.24 C) 4.24 D) 4.80
34 | P a g e
41.if first quartile and MD about median of ND are 13.25 and 8 respectively, then mode?
A) 20 B) 10 C) 15 D) 12
42.The parameters of Normal distribution is N (10, 25), Find 1.Median, Mode, CV, M.D,
Q1, Q3, Q.D, point of inflexion. A) 10, 10, 50, 4, 6.625, 13.375, (5, 15) B) 9, 10, 56, 4,
6.625, 13.375, (5, 15) C) 10, 10, 50, 4, 6.625, 10.375, (5, 15) D) none
43.The 2 Quartile on Normal distribution are 14.6 and 25.4. Find 𝑥̅ , 𝜎, 𝐶𝑉, 𝑀𝐷, 𝑄𝐷? A) 20,
8, 40%, 6.4, 5.4 B) 30, 8, 40%, 6.4, 5.4 C) 40, 8, 40%, 6.4, 5.4 D) none
44.In a normal distribution Q.D is 6, then S.D is A)4 b) 9 c) 7 d) 6.
45.If Q1 = 13.25 and M.D= 8 for ND then Mode is A) 20 B) 10 C) 15 D) 13
46.For ND with mean 150 and SD = 45. Find Q1 and Q3 A) 80, 50 B) 119.65, 180.35 C) 78.9,
125.3 D) none.
47.In ND, 4th central moment, mean=2, variance=4. A) 16 B) 32 C) 48 D) none.
48.In ND, 𝛽1 = 0, 𝛽2 = 3 A) true B) false C) cannot be said D) none.
49.In ND, first moment about origin is 35 and the second moment about 35 is 10, find the
first four central moments? A)0, 10, 0, 300 B) 0, 0, 0, 2 C) 0, 1 , 2, 0
50.In ND, first moment about 8 is 22 and the second moment about 30 is 243, find the
coefficient of variation? A) 10% B) 7% C) 4% D) none
51.For Normal Distribution A) 1st and 2nd Quartiles are equidistant from median B) 2nd
and 3rd Quartiles are equidistant from median C) 1st and 3rd Quartiles are equidistant
from median
52.If the points of inflexion of a normal curve are 6 & 14 respectively. Then standard
deviation is: A) 4 B) 8 C) 16 D) 32
53.If x ~ N (3, 36) and y ~ N (5,64) then x + y ~ (8,A) the value of A is? A) 100B) 10C) 64 D)
36.
54.If X and Y are two independent normal variable with mean 10, 12 and SD 3, 4 then x+y
is normally distributed with A) mean=22, SD =7 B) mean=22, SD =25 C) mean=22, SD
=5 D) mean=22, SD =49
55.If x, y are two independent normal variate with mean𝜇1 , 𝜇2 , SD 𝜎1 , 𝜎2 then x+y=? A)
m=𝜇1 + 𝜇2 , SD = 𝜎1 + 𝜎2 B) m=𝜇1 − 𝜇2 , SD = 𝜎1 + 𝜎2 C) m=𝜇1 + 𝜇2 , SD = 𝜎1 − 𝜎2 D)
none
56.Find the area of the normal curve which lies 1) right of z=2.7, ii) left of z=1.73, iii) right
of z=-.66, iv) left of z= -1.88, v) b/w z=1.25 to z=1.67, vi) z=-1.85 to z=-0.90 vii) z=-1.45
to 1.45 A).0035, .9582, .7454, .0301, .0581, .1519, .853 B).0045, .9582, .7454, .0301,
.0581, .1519, .853 C).0035, .9582, .7354, .0301, .0581, .1519, .853 D) none
Table values: [𝜑(2.7) = 0.4965, 𝜑(1.73) = .4582, 𝜑(. 66) = .2454, 𝜑(1.88) =
.4699, 𝜑(1.25) = .0581, 𝜑(1.67) = 0.4525, 𝜑(1.85) = .4678, 𝜑(. 9) =
.3159, 𝜑(1.45) = .4265].
57.A project yields average cash flow (CF) of Rs 550 lakhs and SD (CF) of Rs 110. Calculate
the i) (CF) > 675 lakhs ii) CF < 450 lakhs iii) CF b/w 425 lakhs and 750 lakhs. A) .1271,
.1814, .8385 B).1271, .1814, .8385 C) .1271, .1814, .8385 D) none.
Table values: [𝜑(1.14) = .3729, 𝜑(. 91) = .3186, 𝜑(1.14) = .3729, 𝜑(1.82) =
.4656 ].
35 | P a g e
58.5000 students were appeared in an examination. The mean of marks was 39.5 with
standard deviation 12.5 marks. Assuming the distribution to be normal, find the
number of students recorded more than 60% marks. [Given when Z = 1.64 area of
normal curve = 0.4494] a) 1000 b) 505 c) 252 d) 2227
59.There are 75 students in a class and their average marks are 50 and S.D of marks is 5.
Number of students who have secured more than 60 marks (given area z=2 to .4772)
A) 1 B) 2 C) 3 D) 4
60.The incomes of a group of 10000 persons having average 750 and SD 50, what was
lowest income among the richest 250? P(z<1.96)=.475 A) 879 B) 568 C) 848 D) none
61.Among 10000 random digits in how many cases do we expect that the digit 3 appears
at most 950 times (the area under S.N.V z=1.667 is 0.4525) A) 568 B) 5687 C) 475 D)
none
62.A sample of 100 dry battery cell tested to find the length of life produced? Mean = 12
hrs and SD = 3 hrs. What % of battery cells are expected to have life less than 6 hrs?
𝜑(2) = 0.4772 (2) = 0.4772 A) 2.56 B) 2.28 C) 1.23 D) 0
63.In a sample of 800 students, mean weight and Sd of weight are found to be 50kg and
20kg respectively. Find the number of students weighing b/w 46 to 62 kg? (z=0.2,
0.0793, z=0.6, 0.2257) A) 250 B) 244 C) 240 D) 260
64.The salary of workers of a factory is known to be normal with average salary Rs10, 000
and SD Rs 2000, if 50 workers receive salary > Rs 14000, then the total number of
workers in factory is A)2193 B) 2000 C) 2200 D) 2500
65.50% of certain product have weights 60 kg or more whereas 10 % have weights 55 kg
or less. On assumption of normality, find the variance of weight? A)15.21 B) 9 C) 16 D)
22.68
66.If x~N(50, 16) which is not possible, A) P(X>60)=.30 B) P(X<50)=.5 C) P(X<60)=.4 D)
P(X>50)=.5
𝑥≤60
67.X follows a N.D with mean= 50 and SD = 10 what is the value of 𝑃 ( ) =? z= 0 to
𝑥>50
z=1 is 0.3413. A) 0.6826 B) 0.7354 C) 0.1983 D) 0.5492
Time Series (TS)

Introduction:
A (TS) is set of statistical observations arranged according to the time of occurrence or
chronological order.
Example:
Data on annual production of a crop say wheat over a number of years, annual results
of an examination over a number of years, the monthly sale of a business establishment over
a month, daily closing price of share in BSE over a number of days, daily maximum
temperature of a place recorded by metrological department over number of days and so
on.
36 | P a g e
Applications:
It has found applications in various disciplines such as Economics, Business, Physics,
Chemistry, Biology, planning etc. Time series are collected over the period and to study the
future based on the past behaviour.
Analysis of Time series:
When a data are arranged in time of their occurrences and often they show changes
from time to time (time =day, week, month or year). These changes are caused due to
combined effect of number of factors, commonly known as Components of (TS).
• It is useful in business executive planning for future operations.
• By studying the various parts of (TS), a business executive can make intelligent choices
regarding capital investment, production, sales and inventory.
• It helps to evaluate the present achievements and to compare with expected
performance and analyse the cause of variations.
Components of TS:
1. Secular Trend or Long-term movement (T)
2. Seasonal variations (S)
3. Cyclical variations (C)
4. Irregular variations (I)
Secular Trend (S)
✓ TS data tend to increase (growth-population, production, bank deposits, sales, prices, and
wages) or stagnation or decrease (decline-death rate, epidemics due to advancement in
medical field, better sanitation) over a long period of time. Example: Economics and
business.
✓ It does not include short-range oscillation.
✓ It gives the pattern of behaviour of the concept under study.
✓ It helps in business forecasting and planning future operations.
Seasonal variations:
✓ It includes short term periodic movements which occur regularly (almost same pattern
year after year) every year.
✓ Major factors are weather conditions (cold drinks rise in summer and falls in winter),
social customs (demand of jewellery is high during marriage season), traditions and
religious festivals (sales get high during festivals like Diwali, Ramzan, Christmas).
Cyclical variations
✓ It is a long-term oscillatory movement in TS with time period more than one year.
37 | P a g e
✓ In Economics or any business activity, there are four phases, viz, Prosperity, Recession,
Depression and recovery-business cycle.
✓ Each phase’s changes gradually into next phase in the order given above until one
business cycle is completed which last from 7 to 9 years.
✓ In times of prosperity- production, sales, employment and other economic activities are
high.
✓ In times of depression, the opposite is true.
✓ It helps business executive to plan the policies.
Irregular or random variations or residual variations
✓ Changes are unpredictable in nature say wars, earthquakes, floods, fires, strikes, famines.
Mathematical Models:
There are two models 1. Additive (Y=T+S+C+I) 2. Multiplicative(Y=T×S×C×I).
Where Y=original data, T=trend data, S=Seasonal component, C=Cyclical Component,
I=Irregular Component.
Method of measuring trend:
1. Freehand curve or graphic method.
2. Method of semi averages.
3. Method of moving averages.
4. Method of least squares.
Freehand or graphic curve:
Example: Fit a trend line
Year 199 199 199 199 200 200 200 200 200 200 200 200
6 7 8 9 0 1 2 3 4 5 6 7
productio 30 33 28 38 42 35 40 47 46 55 52 57
n
Solution:
Method of semi average:
Here value of each part are summed up and averaged. Average of each part is
centered in the time period or part from which it has been calculated.
Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
38 | P a g e
production 38 45 41 53 48 60 56 64 72 68
Semi total 225 320
Semi 225 320
= 45 = 64
average 5 5
Draw a trend line by taking mid point or average of first five years =45 is 1998 and last five
years = 64 is 2003 or (1998, 45) and (2003, 64) are then joined by a staright line to get trend
line.
Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
production 17 20 19 26 24 40 35 55 50 74 69
Semi total 106 283
Semi 106 283
= 21.2 = 56.6
average 5 5
Draw a trend line by taking mid point or average of first five years =21.2 is 1998 and last five
years = 56.6 is 2003 or (1998, 21.2) and (2004, 56.6) are then joined by a staright line to get
trend line.
Method of moving average:
It smoothens the irregularities in a time series by the process of averages.
Example: Compute 3 year moving average values for the following data, also short term
fluctuations
Year 2007 2008 2009 2010 2011 2012 2013
production 2 4 6 8 13 12 14
Solution:
Year 200 2008 2009 2010 2011 2012 201
7 3
Production(Y) 2 4 6 8 13 12 14
3 year moving - 2+4+6=12 4+6+8=18 6+8+13= 8+13 13+12+14= -
total 27 39
12=33
3 year moving 4 6 9 11 13
39 | P a g e
average
Yc
Multiplicati - (4÷4)100=1 (6÷6)100=1 (8÷9)10 (13÷1 12÷11) -
ve model 00 00 0 = 88.88 1) 100=109
(Y÷Yc)100 100=1
18
fluctuations
Short term
Additive - 0 0 -1 2 -1 -
model (Y-
Y c)
A short term fluctuation means only cyclical variations.
Example:
Compute 4 year moving average values for the following data
Year( 1)
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
53 79 76 66 69 94 105 88 80 104 98 96 102 106
Value(2
moving moving )
274 290 305 334 356 367 377 370 378 400 402
average total (3)
4 year
68.5 72.5 76.25 83.5 89.00 91.75 94.25 92.5 94.5 100 100.5
4 year
(4)
141 148.75 159.75 172.5 180.75 186 186.75 187 194.5 200.5
total (5)
centere moving
4 yearly 2 term
70.5 74.375 79.875 86.250 90.375 93.00 93.375 93.50 97.250 97.250
average
moving
= 5÷
(6)
d
40 | P a g e
Example: calculate 5 and 7 year moving averages for the following data
Year Production 5 5 year moving 7 year moving T year moving
average total average
year moving
total
(1) (2) (3) 4=(3)/5 5 6=(5)/7
1998 23
1999 26
2000 28 129 25.8
2001 32 118 23.6 153 21.9
2002 20 104 20.8 140 20
2003 12 86 17.2 123 17.6
2004 20 63 12.6 108 15.4
2005 10 56 11.2 87 12.4
2006 9 55 11 81 11.6
2007 13 57 11.4 81 11.6
2008 11 59 11.8 78 11.1
2009 14 59 11.8 71 10.1
2010 12 49 9.8 63 9
2011 9 39 7.8
2012 3
2013 1
Method of least Square:

Line of best fit that approximates the given time series data.
41 | P a g e
If a staright line trend has an equation Yc = a+bX, to find a and b, we solve two
equations,
∑ 𝑌 = 𝑛𝑎 + 𝑏 ∑ 𝑋 and∑ 𝑋𝑌 = 𝑎 ∑ 𝑋 + 𝑏 ∑ 𝑋 2 , n represents the number of
observations.
Example:
The sales of a commodity (in 000’s)
Year 1999 2000 2001 2002 2003 2004 2005
Sales 82 86 81 86 92 90 99
1. Using the method of least square fit a staright line trend equation of the data.
2. What is the average annual change in the sales?
3. Obtain trend values for the years 1999-2005 and what is the sum of difference
between the actual and the trend value (Additive model)?
4. What are the expected sales for the year 2010?
Solution:
Year
Sales Y X=t-2002 XY X2 Yc Y- Yc
(t)
1999 82 -3 -246 9 80.5 1.5
2000 86 -2 -172 4 83 3
2001 81 -1 -81 1 85.5 -4.5
2002 86 0 0 0 88 -2
2003 92 1 92 1 90.5 1.5
2004 90 2 180 4 93 -3
2005 99 3 297 9 95.5 3.5
∑𝑌 ∑𝑋 ∑ 𝑋𝑌 ∑ 𝑋2 ∑(𝑌 − 𝑌𝐶 )
n=7
= 616 =0 =0 = 28 =0
∑𝑌 616 ∑ 𝑋𝑌 70
The equation of a staright line Yc = a+bX, ∑ 𝑋 = 0 , 𝑎 = = = 88, 𝑏 = ∑ 𝑋2
= =
𝑛 7 28
2.5
YC = 88+2.5X with origin 2002.
42 | P a g e
2. Average annual change in the sales = slope of the staright line trend.
b =2.5×1000 = 2500.
3. trend values for the years 1999-2005 are obtained by taking X=-3, -2, -1, 0, 1, 2, 3 in
the YC = 88+2.5X, (6thcoloumn of the above table)
The sum of difference between the actual and the trend value=0 (lst column of the
above table)
4. For 2010, X = -8, Y2010 = 88+2.5(8)=108 or
Expected sales for the year 2010= Rs 1, 08,000.
Example: A linear trend of sales of a companyis Rs 6, 50, 000 in 1995 and it rises by 16, 500
per year. Find trend equation? If the company knows that its sales in 1998 will be 10% below
the forecast trend sales, find its expected sales in 1998?
Solution: YC = 6,50,000+16500X, if (1995=origin, then 1998 = 3)
For Y1998 = 6,50,000+16500(3) = 6, 99, 500.
10
Actual sales in 1998 = 6,99,500 − × 6,99,500 = 6,99,500 − 69,950 = 6,29,550.
100
Shifting the trend origin:

To reduce calculations in computing the trend values, it is advisable to take mid point
as origin. We have seen ∑ 𝑥 = 0 in many eariler problems, we found the value of a and b by
normal equations.
However, quite often, it becomes necesscary to shift the origin to some other
convenient point int he series.
Example:
Given the following trend values Yc = 72 +2X, [origin; 2003, X unit 1 year, Y unit= annual
production], you are required to shift the origin to 2007.
Solution: to shift origin from 2003 to 2007 in X is 4 units forward, i.e. X by X+4,
Yc = 72 +2(X+4) = 80+2X
Example:
Given the following trend values Yc = 110 +1.5X, [origin; 2008, X unit 1 year, Y unit= annual
production], you are required to shift the origin to 2005.
Solution: to shift origin from 2008 to 2005 in X is 3 units backward, i.e. X by X-3,
Yc = 110 +1.5(X-3) = 105.5+1.5X.
43 | P a g e
Example:
Given the following trend values Yc = 40 +0.4, [origin; 2005, X unit 1 year, Y unit= annual
production], you are required to shift the origin to Ist January 2006.
Solution: It must be clearly noted that when particular year is specified to be in origin of an
annual trend equation with X-units as one year, then the middle of the year, i.e. 1st, July 2005
is preasumed to be an origin.
To shift origin from 1st, July 2005 to Ist January 2006 in X by 0.5 units forward, i.e. X by
X+0.5, Yc = 40 +0.4(X+0.5) = 40.2+0.4X
Conversion annual trend monthly:
Let annual trend equation be Yc = a +bX, Y=annula values, X=one year, constants a
represents the trend value at a origin and b becomes the average amount of change per year
in annual values.
To convert annual trend equation to monthly trend equation we divide a by 12 and b
by 144, the reason why a by 12 is fairly obvious, but for b by 144 is not clear, the reason
being the resulting figure gives the monthly change in annual values, therefore to reduce this
figure to monthly change in monthly values it must be divided by 12 again. These two
divisions are equivalent to a single division by 144.
𝑎 𝑏
Thus Yc = + X.
12 144
Example:
Trend equation Y = 81.6+28.8X, [unit of X=1, origin is 30th June, 1991], adjust the trend
equation to find the monthly trend values with january, 1992 as origin and also find the trend
value for march 1992?
81.6 28.8
Solution: Y = 81.6+28.8X, we ÷ a by 12 and b by 144, then Y = + X, or Y=6.8+0.2X.
12 144
To shift origin to January 1992, viz middle of January, 15th January 1992. (To shift 6.5 months
forward), replacing X by X+6.5 in Y=6.8+0.2(X+6.5), Y= 8.1+0.2X.
Trend valur for March 1992, i.e. 15 march 1992 is obtained by substituting X=2 in Y=
8.1+0.2(2) = 8.5, trend value for March 1992 is 8.5 × 1000 = 8500.
Example:
Trend equation for production of steel, Y = 10.27+1.65X, [unit of X=1 year, origin is 30th
June, 2007, Y=tonnes per year],i) find the trend equation by shifting origin to 2012, ii) find
44 | P a g e
the monthly trend values of X and Y in tonnes, iii) find the value of Y for july, 2013 on the
basis of question (ii)?
Solution: (i) to shift origin from 2007 to 2012, i.e, X by X+5, thus Y = 10.27+1.65(X+5) =
18.52+1.65X.
(ii) To find trend equation with X in month and Y in tonnes per month, we ÷ a by 12, and b
18.52 1.65
by 144, then Y = + X, or Y=1.5433+0.0114X.
12 144
(iii) Number of months b/w 1st July, 2012 and 15 July 2013 = 12.5, i.e substitute X=12.5 in
YJuly, 2013=1.5433+0.0114(12.5) = 1.6858 tonnes.
Example:
Trend equation, YC = 372+288X, [unit of X=1 year, origin 2006, Y=Annual sales], convert
above equation i) to monthly trend equation with january, 2007 as origin and find sales for
march, 2007. Ii) To Quaterly trend equation with 2007 as origin and find sales for 3rd quarter
of 2007.
372 288
Solution: YC = 372+288X, we ÷ a by 12, and b by 144, then Yc = + X, or Yc=31+2X.
12 144
To shift origin to january 2007, middle of january i.e. 15thjan, 2007, move X by X+6.5 in
Yc=31+2(X+6.5)= 44 + 2X, estimated sales for march 2007, (15 march 2007) is found by taking
X=2 (jan 15 to march 15 = 2 months), Yc=44+2(2) =48.
To find the quartely trend equation from YC = 372+288X, ÷ a by 4, and b by 4×4, then
372 288
Y= + X, or Y=93+18X.
4 4×4
To find the sales for 3rd quarter 2007, shift the origin 2.5 quarters forward, i.e. X by X+2.5 in
Y=93+18(X+2.5)=138+18X, estimated sales for 3rd quarter of 2007 is found by taking X=2 in
Ythridquarter,2007 =138+18X =138+18(2) = 174.
Example:
For each of the following derive the monthly trend equation,
i) Yt = 960 + 72X [origin=1998, X unit= 1 year, Y unit = Annual sales of coffee in Rs]
Solution: Given Yt = 960 + 72X, ÷ a by 12, and b by 144, then monthly equation is
960 72
Y= + X, or Y=80+0.5X.
12 144
1
[Origin=1998, X unit= 1 year, Y unit = Annual sales of coffee in Rs], shifiting origin by
2
month forward, we obtain the required monthly trend equation with July, 1998 as origin
45 | P a g e
Y=80+0.5(X+0.5)= 80.25+0.5X.
[Origin=15 July 1998, X unit= 1 year, Y unit = Average sales of coffee in Rs].
Measurement of Seasonal Variations:
✓ It is short term periodic movements which occur regularly every year.
✓ Its Variation are usually found weekly, monthly and quaterly time series.
✓ Its average can be used to forecast seasonal effect.
Reason for studying Seasonal variations:
✓ To find effect of seasonal variations relating to agriculture, industry, commerce,
business etc are of importance to management, planners, industrialists, economists,
businessmen, traders and so on.
✓ It provides guidelines for scheduling production, for inventory and personal
management, for launching effective and timely sales promotion and advertising
programmes ans so on.
✓ Projection of past patterns into the future
✓ Elimination of seasonal component or deseasonalization.
Problems:
1.A fire in factory delaying production for 3 weeks A) regular B) irregular C) cyclical D)
Seasonal
2.An era of prosperity A) regular B) irregular C) cyclical D) Seasonal
3.A need for increased wheat production due to cosntant increase in population A)
regular B) irregular C) cyclical D) secular trend.
4.The increase in day temparture from winter to summer A) regular B) irregular C) cyclical
D) Seasonal
5.A recession A) regular B) irregular C) cyclical D) Seasonal
6.The decline in mortality rate due to improvement in medical science. A) Regular B)
secular trend C) cyclical D) Seasonal
7.A boom in business activity. A) Regular B) irregular C) cyclical D) Seasonal
8.An increase in employment during harvest time. A) Regular B) irregular C) cyclical D)
Seasonal
9.An increase in sales of greeting cards on the occasion of Christmas. A) Regular B)
irregular C) cyclical D) Seasonal
10.Changes in production caused due to flood. A) Regular B) irregular C) cyclical D)
Seasonal
11.An increase in garment sales in October. A) Regular B) irregular C) cyclical D) Seasonal
12.The rainfall in Kolkata that occurred for 4 days in feb 2005 A) regular B) irregular C)
cyclical D) Seasonal
46 | P a g e
13.The Sale of Cold Drink would go up in summers and go down in the winters is an
example of:
14.Trend Variation (b) Cyclical Variation (c) Seasonal Variation (d) Irregular Variation
15.Price hike in petroleum products due to gulf war. A) Regular B) irregular C) cyclical D)
Seasonal
16.A decline in ice cream sales during November to March A) regular B) irregular C)
cyclical D) Seasonal.
17.An overall rise and fall in atime series called A) regular B) irregular C) cyclical D) Secular
trend
18.A time series consists of data arranged in A) regular B) cardinal C) ordinal D)
chronologically
19.The addtive model of Time series is A) Y=T+S+C+I B) Y=T+S-C+I C) Y=T+S+C-I D) Y=T-
S+C+I
20.The trend line Y = a+bX obtained by least square method is A) normal fit B) best fit C)
regular fit D) none.
21.The component of time series useful for long term forecasting is A) regular B) irregular
C) cyclical D) Secular trend
22.For annual data ....... component of time series is missing. A) Regular B) irregular C)
cyclical D) Seasonal
23.If growth rate is constant, trend is ... A) linear B) irregular C) cyclical D) seasonal
24.............. is overall tendency of the time series data to ...... or .......... over a period of
time.
A) Regular, increase, decrese, long B) trend increase, decrese, long C) cyclical,
increase, decrese, long D) Seasonal, increase, decrese, long.
25.The multipilcative model of Time series is A) Y=T×S×C×I B) Y=T+S×C+I C) Y=T×S+C×I
D) Y=T×S×C+I
26.Seasonal variations are short-term variations with period......A) >1 year B) < 1 year C) 1
year
27.The most important factor causing seasonal variations are A) weather and social
customs B) Biological factors C) finance D) import and export.
28.The annual trend equation Y= a+bX, [X unit= 1 year, Y unit = Annual sales], reduced to
𝑎 𝑏 𝑎 𝑏 𝑎 𝑏
monthly trend equation is Y is A) = + X B) = + X C) = + X D) none
12 144 6 144 12 14
29.Cyclical variations caused by A) trade and business cycles B) import and export C)
finance D) costing
30.Periodic movements with duration longer than a year are called A) regular B) irregular
C) cyclical D) Secular trend
31.Trend refers to long term tendency to A) decrease B) increase C) either A or B D) none
32.The simple average method is used to calculate: (a) Trend Variation (b) Cyclical
Variation
33.(c) Seasonal Variation (d) Irregular Variation
47 | P a g e
34.If the trend is absent in the time series, the seasonal indices are obtained by using A)
method of simple average B) ratio-trend C) ratio to moving average D) none.
35.After deseasonalization, a time series is A) Y=T ×C×I B) Y=T+S×C+I C) Y=T×S+C×I D)
Y=T×S×C+I
36.The most widely used method of measuring seasonal variations is A) method of simple
average B) ratio-trend C) ratio to moving average D) none.
37.The method used for study of cyclical variations A) method of simple average B) ratio-
trend C) ratio to moving average D) residual method.
38.Given the following trend values Yc = 110 +3X, [origin; 2006, X unit 1 year, Y unit=
annual production], you are required to shift the origin to 2008. A) Yc = 116 +3X B) Yc =
117 +3X C) Yc = 118 +3X D) none
annual production], you are required to shift the origin to 2002. A) Yc = 116 +3X B) Yc =
117 +3X C) Yc = 118 +3X D) none
40.Given the following quarterly trend values Yc = 50 +2X, [origin: Ist quarter 2004, X unit
1 quarter, Y unit= average quarterly sales], you are required to shift the origin to 2004.
A) Yc = 53 +2X B) Yc = 53 +3X C) Yc = 53 +8X D) none
number units sold per year], you have to convert the above trend equation in to
monthly trend equation, also find sales for month of October 2002 . A) Yc = 40 +0.25X,
58.875 B) Yc = 45 +0.3X, 50.3568 C) Yc = 48 +0.63X, 59.567 D) none.
42.Given the following trend values Yc = 96 +28.8X, [origin; 1stjuly 1997, X unit 1 year, Y
unit= number units sold per year], you have to find the monthly trend equation with
January 1992 as origin also find trend values for august 1991 and march 1992 . A) Yc =
9.3 +0.2X, 8.3, 9.7 B) Yc = 11.3 +0.2X, 7.3, 9.7 C) Yc = 12.3 +0.2X, 8.3, 7.7 D) none.
43.Below are given the figures of sales in thousand quintals of a firm operating in the
sugar industry: Year 2001 2003 2005 2007 2009, Sales in ‘000 quintals 70, 90, 100,
130, 170 Fit straight-line trends to these figures using the least squares method A) Yc =
113 +12X B) Yc = 114 +12X C) Yc = 112 +12X D) none
44.Using the above data, find expected sales in 2012 A) 197 B) 198 C) 196 D) 200
45.Using the above data, find annual increase in the expected sales is (000 quintals) (a) 13
(b)12 (c)10 (d)11
46.The sales of a commodity (in 000) are given below: Year 2001 2002 2003 2004 2005
2006 2007 Sales (in 000 of `) 82 86 81 86 92 90 99 Using the method of least squares,
fit a straight line equation to the data: (a)YC = 89+2.5 X (b) YC = 88+2.5 X (c) YC = 87+2.5
X (d) YC = 86+2.5 X
47.Using above data, what is average annual change in sales? (a) 2600 (b) 2700 (c) 2500
(d) 3000
48.Using above data what is expected sales in 2012? (a) 100000 (b) 108000 (c) 109000 (d)
106000
48 | P a g e
49 | P a g e

Probability, Distributuion and Time Series

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Probability, Distributuion and Time Series

Uploaded by

Copyright:

Available Formats

PROBABILITY, DISTRIBUTION AND TIME SERIES-DR SRIRAM MURALI

Example: What is the probability of a head occurring in one toss of a coin?

Notation: P (A or B) = P (A  B) = P (A) + P (B)

P(A ∪ B ∪ C) = P(A) + P(B) + P(C) [Mutually Exclusive]

P(A ∪ B ∪ C) = P(A) + P(B) + P(C) = 1 [Mutually Exclusive and Exhaustive]

Equally Likely events or equally probable or mutually symmetric events:

Atleast one of the event A, A∪B∪C

All the 3 events A, B, C A∩B∩C

P(A∩B’) = P (A) – P(A∩B) P(B-A) = P(A’∩B) = P (B) – P(A∩B)

3. P (A or B)  P (A) + P (B)  not M.E.E

 P (B’)  1  B’ is not a sure event.

 P (B)  1  B is not a sure event

The occurrence of event A  the occurrence of another event B

Odds in Favours and Against:

Note: Probability is reported as a fraction, proportion or percentages, so 13:52 is 13/52 i.e.

Cumulative probability Distribution:

Probability Mass or distribution Function:

147.For the events E= (X is a prime number} and F = (X<4},

Poisson distribution: (P.D)

Assumption on Poisson distribution:

✓ Standard Deviation = 𝜎 = √𝑛𝑝

✓ In Poisson distribution Mean = Variance 𝑥̅ = 𝜎 2

✓ Parameter is Mean or Expectation or average.

✓ Probability (non – zero success or at least one success) is given by 𝑃(𝑥 ≥ 1) = 1 − 𝑒 −𝑚

✓ Poisson distribution is always positively skewed.

Properties of Normal Distribution:

✓ Mean deviation about 𝑥̅ = 0.8𝜎

Standard normal variate: (s.n.v)

Time Series (TS)

Method of least Square:

Shifting the trend origin:

You might also like