STATISTICS and PROBABILITY

Chapter 1, Lesson 3:
Computing the Mean, Variance, and Standard Deviation of a Discrete Probability
Distribution
I. Overview:
 This lesson will demonstrate an understanding of key concepts of functions.
II. Objectives:
 Illustrates the mean and variance of a discrete random variable.
 Calculates the mean and the variance of a discrete random variable.
III. Content Outline:
 Please take time to read and understand this part because all graded activities and
quizzes will be coming from these contents.

 Mean
- the sum of all measurements divided by the number of RECALL:
observations in the data set. CENTRAL TENDENCY
 Median
- the middle value that separates the higher half from the lower half  Mean
of the data set.  Median
 Mode  Mode
- the most frequent value in the data set.

DISCRETE RANDOM VARIABLES

Mean ( μ )
- Also known as “expected value”
- The weighted average of all possible values of the random variables.

μ=∑ x ∙ P (X )

Variance (σ 2 )
- Measure of spread or dispersion.
- Measures the variantion of the value of a random variable from the mean
- the degree of spread in your data set
(The more spread the data, the larger the variance is in relation to the mean.)

σ =∑ ¿ ¿
2

Standard Deviation (σ )
- Measures the dispersion of a data set relative to its mean and is calculated as the
square root of the variance.
(A low standard deviation indicates that the values tend to be close to the mean of the
set, while a high standard deviation indicates that the values are spread out over a
wider range.)

σ =√ ∑ ¿ ¿ ¿
 Number of Cards Sold(x) Probability P(X)
1
0
Example: 10
2
1
The number of cars sold per 10
day at a local car dealership, 3
along with its corresponding 2
10
probabilities, is shown in the
succeding table. Compute te 2
mean, variance and standard 3
10
deviation of the probability
distribution. 2
4
10

Computing Mean, Variance, Standard Deviation

Subtract x and value of mean in every row.

Multiply each elements of x to Square the answers of (x−μ) Multiply the answers of ¿ and
each elements of P(X). in every row. elements of P(X) in every row.

x P(X) x ∙ P( X) (x−μ) ¿ ¿
1 1
0 0 0−2.2=−2.2 2
(−2.2) =4.84 ( 4.84 ) =0.484
10 10
2 2 2
1 1−2.2=−1.2 2
(−1.2) =1.44 ( 1.44 ) =0.288
10 10 10
3 6 3
2 2−2.2=−0.2 2
(−0.2) =0.04 ( 0.04 ) =0.012
10 10 10
2 6 2
3 3−2.2=0.8 2
(0.8) =0.64 ( 0.64 ) =0.128
10 10 10
2 2 2
4 4−2.2=1.8 2
(1.8) =3.24 ( 3.24 ) =0.648
10 10 10

σ =∑ ¿ ¿
2

μ=∑ x ∙ P ( X ) = 1.56
¿ 2.2

Find the mean of the σ =√ ∑ ¿ ¿ ¿

probability distribution by ¿ √ 1.56=1.25
adding all the elements in
third column.

Find the variance of the probability Get the square root of the
distribution by adding all the variance to get the
elements in last column. standard deviation.
ALTERNATIVE WAY in finding the Variance and Standard
Deviation of a Probability Distribution
1. Find the mean of the probability distribution
2. Multiply the square of the value of the random variable to its
corresponding probability.
3. Get the sum of the results obtained in Step 2.
4. Subtract the mean from the results obtained in Step 3.

Variance (σ 2 )

σ =∑ ¿ ¿
2

Standard Deviation (σ )

σ =√ ∑ ¿ ¿ ¿

Use the previous example:

x P(X) x ∙ P( X) ¿ ¿
1 1
0 0 2
(0) =0 (0 ) =0
10 10
2 2 2 2
1 2
(1) =1 ( 1) =
10 10 10 10
3 6 3 12
2 2
(2) =4 (4 ) =
10 10 10 10
2 6 2 18
3 2
(3) =9 (9 ) =
10 10 10 10
2 2 2 32
4 2
( 4) =16 ( 16 ) =
10 10 10 10

μ=∑ x ∙ P ( X )=2.2

σ =∑ ¿ ¿ σ =√ ∑ ¿ ¿ ¿
2

= 6.4−( 2.2 ) 2
¿ √ 1.56
= 1.56 = 1.25
IV. Activities:

3
x 1 6 11 16 21
1 1 2 1 2
P(X)
7 7 7 7 7

TASK 1.
Find the following using the standard method:
 Mean
 Variance
 Standard deviation

TASK 2.
Find the following using the alternative method:
 Mean
 Variance
 Standard deviation

TASK 3.
 Verification if the two methods has the same
answers.

NOTE: You can use your calculators, if needed.

V. Assignment:

2
1. The data shows the company’s probability of earning a projected profit for one
year. Solve for the average projected profit, variance and standard deviation.
(You can use any method:
STANDARD method or ALTERNATIVE method, NOT BOTH)

PROFIT (in millions) PROBABILITY (in percent)

5.6 20
4.7 15
8.2 18
3.3 35
10.0 12