Business Statistics Chapter 4 – Flashcards
Unlock all answers in this set
Unlock answersquestion
Probability
answer
Numerical measure of the likelihood that an event will occur, assigned 0 to 1.
question
What are ALWAYS the Probability values assigned on a scale?
answer
Zero to One.
question
The Probability assigned to each experimental outcome must be between:
answer
Zero to One inclusively.
question
Zero < P(E i) <1 for all i
answer
E i is the i th experimental outcome
P(E i) is its probability
question
The same of the probabilities for all experimental outcomes must equal:
answer
One
question
P(E1)+P(E2)+....+(P(En)=__
answer
1
question
A Probability near ____ indicates an event/outcome is almost certain to occur.
answer
Near One.
question
A Probability near ___ indicates an event/outcome is almost unlikely to occur.
answer
Near Zero.
question
Statistical experiments are also referred to as ___.
answer
Random Experiments.
question
Experiment
answer
Process that generates well-defined outcomes.
question
Sample Space
answer
Set of all experimental outcomes.
question
Sample Point
answer
Another name for an experimental outcome.
question
Experiment:
Toss a coin
Inspection a part
Conduct a sales call
Roll a die
Play a football game
answer
Experiment Outcomes
Head, tail
Defective, non-defective
Purchase, no purchase
1, 2, 3, 4, 5, 6
Win, lose, tie
question
Tree diagram
answer
Graphical representation that helps in visualizing a multiple-step experiment.
question
Basic requirements for assigning probabilities
answer
probability assigned to each experimental outcome must be between 0 and 1. the sum of the probabilities for all the experimental outcomes must equal 1
question
Sources of Probability Methods: (list 3)
answer
1. Classical
2. Relative Frequency
3. Subjective
question
Classical Method
answer
**equally likely outcomes**
all the experimental outcomes are equally likely.
Just putting
question
Relative Frequency Method
answer
**Experimentation/Historical Data**
Data are available to estimate the proportion of the time the experimental outcome will occur if the experiment is repeated a large number of times.
question
Subjective Method
answer
**Judgment**
When one cannot realistically assume that the experimental outcomes are equally likely
question
Event
answer
collection of sample points
question
What is equal to the sum of the probabilities of the sample points in the event?
answer
Probability of any event.
question
Bayes' theorem
answer
provides a means for combining subjectively determined prior probabilities with probabilities obtained by other means to obtain revised probabilties
question
Complement of A
answer
defined to be the event consisting of all sample points that are not in A
Looks like: A^c
question
Union of A and B
answer
the event containing all sample points belonging to A or B or BOTH
Looks like: A U B
question
Intersection of A and B
answer
the event containing the sample points belonging to both A and B
Looks like: A ∩ B
question
Addition Law
answer
a way to compute the probability that event A or event B or BOTH A and B occur.
question
Addition Law Equation
answer
P (A U B)=P(A)+P(B)-P(A∩B)
question
Mutually exclusive events
answer
two events are said to be mutually exclusive if the events have no sample points in common
question
Conditional probability
answer
considering the probability of an event A given the condition that event B has occurred
Looks like: P(A|B)
question
Joint probabilities
answer
each of the values gives the probability of the intersection of two events
question
Marginal probabilities
answer
summing the joint probabilities in the corresponding row or column of the joint probability table
question
Independent events
answer
if A given B equals A, and B given A equals B
(ignore the middle letter)
question
Multiplication Law
answer
used to compute the probability of the intersection of two events
Looks like:
P(A ∩ B) = P(B) P(A|B)
