 Demonstrate your conceptual understanding of the Pre-MBA Statistics course.

 Calculate conditional probabilities and expected values for distributions.

 Apply your understanding of point estimation to construct a point estimate of the mean
and standard deviation of given data.
 Construct a confidence interval around point estimates.

Course Pre-MBA statistics:

This course helped me to understand various statistical aspects such as sampling, data classifications,
probability and estimation and hypothesis testing. All these numnerical data and analysis helps in decision
making.

Conditional Probability and Expected Values for Distribution:

1. Conditional probability is the possibility of outcome of an event based on whether that event has
occurred.
2. It helps in identifying the probability of occurance of an event given that another event has
already occurred.
3. Formula:
𝐴
𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐵)𝑋 𝑃( ) Eq 1
𝐵

𝐴 𝑃(𝐴∩𝐵)
𝑃( ) = Eq 2
𝐵 𝑃(𝐵)

4. Independence of the event, these events are such that occurrence of an event provides no
additional.
𝐴
𝑃 ( ) = 𝑃(𝐴) Eq 3
𝐵

Where, A & B are independent events.

Thus equating above equations,

𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴)𝑃(𝐵) Eq 4

5. Expected value is nothing but the weighted average of all the possible values. The random
variable can take weighed by appropriate probabilities.
6. Expected value can be calculated for single discrete variables, single continous variables, multiple
discrete variables and multiple continous variables.
7. Formula for Random variable x:
𝐷𝑖𝑠𝑐𝑟𝑒𝑡𝑒: ∑ 𝑥𝑖 𝑓𝑥 (𝑥𝑖 ) = ∑ 𝑥𝑖 𝑃(𝑥 = 𝑥𝑖 )
𝑖 𝑖
∞

𝐶𝑜𝑛𝑡𝑖𝑛𝑜𝑢𝑠: ∫ 𝑥 𝑓𝑥 (𝑥)𝑑𝑥
−∞
Point Estimation and Confidence Level:
1. A random sample is nothing but a collection of samll number of elements from the population in
which each element has an equal chance of being selected in the sample.
2. Estimator is nothing but a sample statistic, eg. Sample Mean, Variance, Proportion.
3. Estimate is a value of the sample statistic given that the sample:
a) Know varies with the sample used
b) Single valued, hence called a point estimate
4. Estimatots are methods to estimate population parameter based on random sample
5. These work on a random sample and estimates are values of estimators when a random sample
is used to compute values.
6. Parameter values are constant whereas estimates vary based on the sample and they are almost
never equal to parameter values.
7. Properties of Estimators are:
a) Population mean
b) Population median
c) Population standard deviation
d) Population range
8. A point estimator is said to be unvbaised if it neither systematically overestimates nor
underestimates the population it estimates.
9. A point estimator is said to be unbaised if its expected value equals the population parameter
that it estimates.
10. Estimator fo sample mean, all the samples = Independent + Identically distributed
11. Estimator for Sample Standard Deviation:
a) This distribution is not symmetric around the population parameter.
b) Thus, a sample deviation is not an unbaised estimator of the population standard
deviation, it is a biased estimator.
c) There is a correction factor that will turn this biased estimator into an unbaised
estimator.
12. Formulas used are:
a) First calculate Standard Error:
𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝐷𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 𝜎
𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝐸𝑟𝑟𝑜𝑟 = =
√𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠𝑎𝑚𝑝𝑙𝑒𝑠 √𝑛
b) Then calculate the Width of Confidence Level
1− 𝛼
𝑥= 𝑥 𝑆𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝐸𝑟𝑟𝑜𝑟
2
c) Thus Total Width of the Population mean = 2x, i.e. 2 times of the Width of the
confidence level.