Binomial Probabilities

Data
Sample size 4
Probability of an event of interest 0.1

Statistics
Mean 0.4
Variance 0.36
Standard deviation 0.6

Binomial Probabilities Table

X P(X)
0 0.6561
1 0.2916
2 0.0486
3 0.0036
4 0.0001
Excel function: =BINOM.DIST(xi , n, π, cumulative) where we enter false for cumulative probability
P(X=x|n,π)=probability that X=x occurrences of event of interest, given n and π
x = number of occurrences of “event of
interest” in sample, (x = 0, 1, 2, ..., n).
n = sample size (number of trials or obs.)
π = probability of “event of interest”
1 – π = probability of not having an
event of interest

Suppose the probability of an invoice payment being late is 0.10. What is the probability of 1 late invoice payment in a group
x = 1, n = 4, and π = 0.10
e probability

late invoice payment in a group of 4 invoices?

Binomial Probabilities

Data
Sample size 4
Probability of an even 0.1

Statistics Mean (Slide 14 of Ch. 5 Discrete Probability Distributions Lec

μ  E(X)  n
Mean =B4 * B5
Variance =B8 * (1 - B5)
Standard deviation =SQRT(B9)
Standard Deviation (Slide 14 of Ch. 5 Discrete Probability Dis
Binomial Probabilities Table

σ  n (1 -  )
X P(X)
0 =BINOM.DIST(A14, $B$4, $B$5, FALSE)
1 =BINOM.DIST(A15, $B$4, $B$5, FALSE)
2 =BINOM.DIST(A16, $B$4, $B$5, FALSE)
3 =BINOM.DIST(A17, $B$4, $B$5, FALSE)
4 =BINOM.DIST(A18, $B$4, $B$5, FALSE)
 Probability Distributions Lecture PPT) Mean and Standard deviation from mini lecture before Ch. 5
N
  E(X)   xi P ( X  x i )
i 1
Ch. 5 Discrete Probability Distributions Lecture PPT)

N
σ  [x
i 1
i  E(X)]2 P(X  x i )
 Binomial Probability Histogram
0.7

0.6

0.5

0.4
P(X)

0.3

0.2

0.1

0.0
0 1 2 3 4

Number of Events of Interest

Binomial Probabilities

Data
Sample size 4
Probability of an event of interest 0.1

Statistics
Mean 0.4
Variance 0.36
Standard deviation 0.6Author:
Author:
= P(X=0) + P(X=1)
= 1- P(X<=2)
+ P(X=2)
Binomial Probabilities Table
X P(X) P(<=X) P(<X) P(>X) P(>=X)
0 0.6561 0.6561 0.0000 0.3439 1.0000
1 0.2916 0.9477 0.6561 0.0523 0.3439
Author:
2 0.0486 0.9963 0.9477 0.0037 0.0523
= 1 - P(X<2)
3 0.0036 0.9999 0.9963 0.0001 0.0037
4 0.0001 1.0000 0.9999 0.0000 0.0001

Author:
= P(X≤2) - P(X=2)
Author:
= 1 - P(X<2)
Binomial Probabilities

Data
Sample size 4
Probability of an event 0.1

Statistics
Mean =B4 * B5
Variance =B8*(1 - B5)
Standard deviation =SQRT(B9)

Binomial Probabilities Table

X P(X)
0 =BINOM.DIST(A14, $B$4, $B$5, FALSE)
1 =BINOM.DIST(A15, $B$4, $B$5, FALSE)
2 =BINOM.DIST(A16, $B$4, $B$5, FALSE)
3 =BINOM.DIST(A17, $B$4, $B$5, FALSE)
4 =BINOM.DIST(A18, $B$4, $B$5, FALSE)
P(<'=X)
=BINOM.DIST(A14, $B$4, $B$5, TRUE)
=BINOM.DIST(A15, $B$4, $B$5, TRUE)
=BINOM.DIST(A16, $B$4, $B$5, TRUE)
=BINOM.DIST(A17, $B$4, $B$5, TRUE)
=BINOM.DIST(A18, $B$4, $B$5, TRUE)
 P(<X) P(>X) P(>'=X)
=C14 - B14 =1 - C14 =1 - D14
=C15 - B15 =1 - C15 =1 - D15
=C16 - B16 =1 - C16 =1 - D16
=C17 - B17 =1 - C17 =1 - D17
=C18 - B18 =1 - C18 =1 - D18
Binomial Probabilities

Data
Sample size 4
Probability of an event of interest 0.1

Statistics
Mean 0.4
Variance 0.36
Standard deviation 0.6

Binomial Probabilities Table

X P(X) P(<=X) P(<X) P(>X) P(>=X)
0 0.6561 0.6561 0.0000 0.3439 1.0000
1 0.2916 0.9477 0.6561 0.0523 0.3439
2 0.0486 0.9963 0.9477 0.0037 0.0523
3 0.0036 0.9999 0.9963 0.0001 0.0037
4 0.0001 1.0000 0.9999 0.0000 0.0001
Binomial Probabilities

Data
Sample size 4
Probability of an event of interest 0.1

Statistics
Mean =B4 * B5
Variance =B8 * (1 - B5)
Standard deviation =SQRT(B9)

Binomial Probabilities Table

X P(X)
0 =BINOMDIST(A14, $B$4, $B$5, FALSE)
1 =BINOMDIST(A15, $B$4, $B$5, FALSE)
2 =BINOMDIST(A16, $B$4, $B$5, FALSE)
3 =BINOMDIST(A17, $B$4, $B$5, FALSE)
4 =BINOMDIST(A18, $B$4, $B$5, FALSE)
 P(<'=X) P(<X) P(>X) P(>'=X)
=BINOMDIST(A14, $B$4, $B$5, TRUE) =C14 - B14 =1 - C14 =1 - D14
=BINOMDIST(A15, $B$4, $B$5, TRUE) =C15 - B15 =1 - C15 =1 - D15
=BINOMDIST(A16, $B$4, $B$5, TRUE) =C16 - B16 =1 - C16 =1 - D16
=BINOMDIST(A17, $B$4, $B$5, TRUE) =C17 - B17 =1 - C17 =1 - D17
=BINOMDIST(A18, $B$4, $B$5, TRUE) =C18 - B18 =1 - C18 =1 - D18