Discrete Random Variables.
Binomial
Distribution
Lecture Outline
• Discrete Random Variables
• Binomial Distribution
Discrete Random Variable Examples
A random variable is discrete if it has a finite or countable number
of possible outcomes that can be listed.
Experiment Random Variable Possible Values
Make 100 sales Calls # of sales 0, 1, 2, … , 100
Inspect 70 Cell phones # of defects 0, 1, 2, … , 70
Answer 33 Questions # of correct 0, 1, 2, … , 33
Count Cars at Toll between 11:00 & 13:00 # of cars arriving 0, 1, 2, … , n
Discrete Probability Distributions
• A discrete probability distribution lists each possible value the
random variable can assume, together with its probability. A
probability distribution must satisfy the following conditions:
In Words In Symbols
1. The probability of each
value of the discrete random 0 P (x) 1
variable is between 0 and 1,
inclusive.
2. The sum of all the ΣP (x) = 1
probabilities is 1.
Measures for Discrete Distributions
1. Expected Value (Mean of probability distribution)
• Weighted average of all possible values
• = E(x) = x p(x)
2. Variance
• Weighted average of squared deviation about
mean
• 2 = E[(x = E(x2) - 2(x p(x)
Here, E(x2) = x2 p(x)
3. Standard Deviation
●
Example
At a raffle, 500 tickets are sold for $1 each for two prizes of $100 and $50.
a. What is the expected value of your gain?
b. What is the standard deviation of your gain?
Solution.
1. Your gain for the $100 prize is $100 - $1 = $99
2. Your gain for the $50 prize is $50 - $1 = $49
3. Remaining times your gain is -$1 (loss).
a. E(X) = µ = 99*49* + (-1)* = -$0.70
b. Variance = 2 = (x p(x) = (99 + 0.70)2*(49+0.70)2* +
+ (-1 + 0.70)2* = $24.91
Standard deviation = =
Binomial Distribution
A binomial experiment is a probability experiment that satisfies the following
conditions.
1. The experiment is repeated for a fixed number of trials, where each trial is
independent of other trials.
2. There are only two possible outcomes of interest for each trial. The outcomes can be
classified as a success (S) or as a failure (F).
3. The probability of a success P(S) is the same for each trial.
4. The random variable x counts the number of successful trials.
Notations
Symbol Description
n The number of times a trial is repeated.
p = P (S) The probability of success in a single trial.
q = P (F) The probability of failure in a single trial. (q = 1 – p)
x The random variable represents a count of the number of
successes in n trials: x = 0, 1, 2, 3, … , n.
Example
Student is taking a 20 question multiple choice test. Each question has 5 choices. Student
has not studied and tries to guess the correct answer. He needs at least 8 correct answers
to pass.
Is this a Binomial experiment?
Binomial Probability Formula
In a binomial experiment, the probability of exactly x
successes in n trials is
n!
P (x ) nC x p xq n x p xq n x.
(n x )!x !
Example:
A bag contains 10 chips. 3 of the chips are red, 5 of the chips are white, and 2 of the chips are blue.
Three chips are selected, with replacement. Find the probability that you select exactly one red chip.
Example
In a recent study, 90% of the homes in the United States were found to
have large-screen TVs. In a sample of nine homes, what is the
probability that at most seven homes have large-screen TVs?
Mean, Variance and Standard Deviation
Population Parameters of a Binomial
Distribution Mean:
μ np
Variance: σ 2 npq
Standard deviation: σ npq
Example:
One out of 5 students at a local college say that they skip breakfast in the morning. Find
the mean, variance and standard deviation if 10 students are randomly selected.
n 10 μ np σ 2 npq σ npq
1
p 0.2 10(0.2) (10)(0.2)(0.8) 1.6
5
2 1.6 1.3
q 0.8
References
1. Textbook (McClave). Chapter 4.
2. Textbook (Lind et al). Chapter 6.
3. https://www.rdocumentation.org/packages/stats/versions/3.3/topics/Binomial
Homework Exercises
1. The information below is the number of daily emergency service calls made by the volunteer
ambulance service of Walterboro, South Carolina, for the last 50 days. To explain, there were
22 days on which there were two emergency calls, and 9 days on which there were three
emergency calls.
• Is this an example of a discrete or continuous probability distribution? (discrete)
• What is the mean number of emergency calls per day? (1.7)
• What is the standard deviation of the number of calls made daily? (1.005)
Homework Exercises
2. An American Society of Investors survey found 30% of individual investors have used a
discount broker. If we randomly select 12 individuals,
• Calculate the mean and standard deviation of number of investors who used discount
account. (mean = 3.6, std = 1.587)
• What is the probability of having at least one individual with a discount account? (0.9862)
• What is the probability of having more than 3 but fewer than 9 individuals with a discount
account? (0.506)
3. Industry standards suggest that one out of ten new vehicles require warranty service within the
first year. Jones Nissan in Sumter, South Carolina, sold 8 Nissans yesterday.
• What is the probability that none of these vehicles requires warranty service? (0.43)
• What is the probability more than two vehicles require warranty service? (0.04)
• What is the probability between 1 and 5 (both inclusive) vehicles require warranty service?
(0.57)
