STATISTICS & PROBABILITY

Lectures: Tôn Thất Quốc Tấn Group 5:

Course: MAS202 Minh Phương
Khánh Ly
Diễm Hương
Bích Trâm
Đình Huy
Nhật Tuyền

A. CHAPTER 4: BASIC PROBABILITY

1/ Basic Probability Concepts:
a. Events and Sample Spaces:
❖ A random experiment is a mechanism that produces a definite outcome
that cannot be predicted with certainty.
Ex: Rolling a dice. There can be 6 possible outcomes {1, 2, 3, 4, 5, 6}. However,
none of the outcomes can be exactly predicted.
=> Rolling a dice: a random experiment

❖ When a random experiment is repeated many times each one is known as a

trial.
Ex: Roll a dice once: a trial.

❖ The sample space S of a random experiment is the collection of all

possible outcomes.
Ex: Roll a dice and record number dots. => S={1, 2, 3, 4, 5, 6}

❖ An event E associated with a random experiment is a subset of the sample

space.
Ex: E1={6}, E2={even}={2, 4, 6}

❖ The probability P of any outcome is a number between 0 and 1.

❖ The probabilities of all the outcomes add up to 1.
 ❖ The probability of an event is the sum of the probabilities of the
outcomes in E
|𝐸1| 1 |𝐸2| 3
Ex1: 𝑃(𝐸1) = |𝑆|
= ,  𝑃(𝐸2) =
6 |𝑆|
=
6

X: number of dots when tossing a dice.

1
𝑃(𝐸1) = 𝑃(𝑋 = 1) =
6
1 1 1 3
𝑃(𝐸2) = 𝑃(𝑋 = 2) + 𝑃(𝑋 = 4) + 𝑃(𝑋 = 6) = + + =
6 6 6 6

Ex2: => probability distribution

𝐸3:  𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑔𝑜𝑎𝑙𝑠  > 2

𝑃(𝐸3) = 𝑃(𝑋 > 2) = 𝑃(𝑋 = 3) + 𝑃(𝑋 = 4) = 0.11 + 0.02

b. Basic set operations :

❖ The union of two events is the event that consists of all outcomes that are
contained in either of the two events. We denote the union as 𝐸1 ∪ 𝐸2
❖ The intersection of two events is the event that consists of all outcomes
that are contained in two events. We denote the intersection as 𝐸1 ∩ 𝐸2
❖ The complement of an event in a sample space is the set of outcomes in the
sample space that are not in the event. We denote the component of the
event E as E’.

c. Additional rule:
 d. Mutually exclusive events:

Events A and B are said to be mutually exclusive if it is not possible that both
occur at the same time.
Ex: Toss of a coin.
• Let A be the event that the coin lands on heads

• Let B be the event that the coin lands on tails.

=> In a single fair coin toss, events A and B are mutually exclusive.

Independent events
Events A and B are said to be independent if the probability of B occurring is
unaffected by the occurrence of the event A happening.
Ex: Tossing a coin twice.
• Let A be the event that the first coin toss lands on heads.
• Let B be the event that the second coin toss lands on heads.
→ Clearly the result of the first coin toss does not affect the result of the second coin
toss.
→ Events A and B are independent.

2/ Conditional probability:
 𝑃(𝐴 ∩ 𝐵) = 𝑃(𝐴|𝐵)𝑃(𝐵) = 𝑃(𝐵|𝐴)𝑃(𝐴)

3/ Bayes’ Theorem:

B. CHAPTER 5: DISCRETE PROBABILITY

DISTRIBUTIONS
1/ The probability distribution for a Discrete variable:
Numerical variables as either having discrete, integer values that represent a count
of something, or continuous, values that arise from a measuring process. This
chapter deals with probability distributions that represent a discrete numerical
variable, such as the number of social media sites to which a person belongs or, in
the Ricknel Home Centers scenario, the number of orders that the system has
tagged for possible errors.
PROBABILITY DISTRIBUTION FOR A DISCRETE VARIABLE
A probability distribution for a discrete variable is a mutually exclusive list of all the
possible numerical outcomes along with the probability of occurrence of each
outcome.
a. Expected value of a Discrete variable:
The expected value of a discrete variable is the population mean, u, of its probability
distribution. To calculate the expected value, you multiply each possible outcome, x,
by its corresponding probability, P(X = x), and then sum these products.

b. Variance and Standard deviation of a Discrete variable:

2/ Binomial Distribution:
In some cases, a mathematical expression or model can be used to calculate the
probability of a value, or outcome, for a variable of interest. For discrete variables,
such mathematical models are also known as probability distribution functions. One
such function that can be used in many business situations is the binomial
distribution.
To find the number of ways of selecting x objects from n objects, irrespective of
sequence, you use the rule of combinations given in Equation (5.4).
Equation (5.5) is the mathematical model that provides a general formula for
computing any probability from the binomial distribution with the number of events of
interest, x, given n and π.

Equation (5.5) restates what was intuitively derived previously. The binomial variable
X can have any integer value x from 0 through n. In Equation (5.5), the product

represents the probability of exactly x events of interest from n observations in a

particular sequence.

The term

is the number of combinations of the x events of interest from the n observations

possible.
Hence, given the number of observations, n, and the probability of an event of
interest, π, the
probability of x events of interest is
P(X = x n, π) = (number of combinations) x (probability of a particular combination)

a. Histograms for Discrete variables:

Discrete histograms visualize binomial distributions. Unlike histograms for
continuous variables that Section 2.4 discusses, the bars for the values in a discrete
histogram are very thin and there is a large gap between each pair of bars. Ideally,
discrete histogram bars would have no width and some programs, such as JMP, can
suggest that lack of width by graphing vertical lines (“needles”) in lieu of solid bars.

For a binomial probability distribution, the shape depends on the values of π and n.
When ever π = 0.5, the binomial distribution is symmetrical, regardless of how large
or small the value of n. When π ≠ 0.5, both π and n affect the skewness of the
distribution.

b. Summary measures for the Binomial distributions:

The mean (or expected value) of the binomial distribution is equal to the product of n
and π. Instead of using Equation (5.1) to compute the mean of the probability
distribution, you can use Equation (5.6) to compute the mean for variables that follow
the binomial distribution.

On the average, over the long run, you theoretically expect

m = E(X) = nπ = (4)(0.1) = 0.4 tagged order form in a sample of four orders.
The standard deviation of the binomial distribution can be calculated using Equation
(5.7).

3/ Poisson Distribution:
Equation (5.8) is the mathematical expression for the Poisson distribution for
computing the probability of X = x events, given that l events are expected.
4/ Covariance of a Probability distribution and Its application in Finance:
Section 5.1 defines the expected value, variance, and standard deviation for the
probability dis-tribution of a single variable. The Section 5.4 online topic discusses
covariance between two variables and explores how financial analysts apply this
method as a tool for modern portfolio management.

5/ Hypergeometric Distribution:
The hypergeometric distribution determines the probability of x events of interest
when sample data without replacement from a finite population has been collected.
The Section 5.5 online topic discusses the hypergeometric distribution and illustrates
its use.

6/ Using the Poisson distributions to Approximate the Binomial distribution:

The Poisson distribution approximates the binomial distribution when n is large and p
is very small. The approximation gets better as gets larger and π gets smaller. The
Section 5.6 online topic explains how to use this approximation.

C. CHAPTER 6: CONTINUOS PROBABILITY

DISTRIBUTIONS

1/ What is Continuous probability distributions ?

❖ A continuous distribution is a distribution in which the data can take on any
value within a specified range.
❖ The probability distribution continuously changes with the shape of the area
under the curve.
❖ There are many examples of continuous random variables: Individual height
and weight, flight time from Da Nang to Sai Gon,....
❖ The probability distributions for continuous random variables have several
other forms that one can use such as: the normal, uniform, and exponential
probability distributions.
❖ However, we will start with the simplest way: Normal distributions

2/ Normal distributions:
❖ The normal distribution is determined by two parameters: the mean 𝜇 and the
variance 𝜎 2
❖ Normal distribution features:
+ The normal distribution has a skewness of 0 (symmetrical), sharpness equal to 3,
and is bell-shaped.
+ Symmetric normal distribution over the mean ( 𝑃(𝑋 ≤ 𝜇) = 𝑃(𝜇 ≤ 𝑋) = 0.5 ), so mean
= median = number of modals ( mean = median = mode )
❖ X BNN is continuously normally distributed if its probability density function is
defined as:
1 2/2𝜎2
𝑓(𝑋) = 𝑒 −(𝑋−𝜇)
𝜎√2𝜋
❖ Here μ is the mean of X; is the standard deviation of X; 𝜋 = 3,14159 and ℮ =
2,71828 ; 𝑋  = any value of the continuos variable, −∞ 6 𝑋 6 ∞
❖ Transformation formula: The Z value is equal to the difference between X and
the mean, m, divided by the standard deviation, s
𝑥−𝜇
𝒵= 𝜎
.

❖ The transformation formula converts a normally distributed variable, X, into a

corresponding normalized normal variable Z they are guaranteed to have 𝜇 =
0 and 𝜎 = 1

FINDING X VALUE:
❑ Finding X value for a known probability
❑ Step to find the X value
• Find the Z value for a known probability
• Convert to X units using the formula: 𝑋 = 𝜇 + 𝑍𝜎

3/ The uniform distributions:

❖ A uniform distribution is an equal probability distribution for all possible

outcomes of a random variable.
4/ The Exponential distributions:
❖ Used to model the time interval between two occurrences of an event.
Ex: Time between phone calls to the main operator

EXERCISE:
QN=16 The employees of a company were surveyed on questions
regarding their educational background (college degree or no
college degree) and marital status (single or married). Of the
600 employees, 400 had college degrees, 100 were single,
and 60 were single college graduates. The probability that an
employee of the company is single or has a college degree
is__________
a. 0.10
b. 0.25
c. 0.667
d. 0.733
e. None of the other choices is correct
ANSWER: D
MARK: 1
UNIT: 4.1
LO:
 MIX CHOICES: Yes

16/ Total number of employees=600

Number of single college graduates=60
Number of singles = 100
Number who has college degrees = 400
P(college graduate) = 400 ÷ 600 = 2/3
P(single) = 100 ÷ 600 = 1/6
P(single and college graduate) = 60 ÷ 600 = 1/10
P(single or college graduate) = P(single) + P(college graduate) - P(single and
college graduate)
= 1/6 + 2/3 - 1/10
= 0.733
->Therefore, the probability that an employee of the company is single or has a
college degree is 0,733

QN=17 When using the general multiplication rule, P (A and B) is

equal to__________
a. P(A|B)P(B)
b. P(A)P(B)
c. P(B)/P(A)
d. P(A)/P(B)
ANSWER: A
MARK: 1
UNIT: 4.2
LO:
MIX CHOICES: Yes

17/The general multiplication rule states that the probability of both event A
and event B occurring is equal to the probability of event A given event B
multiplied by the probability of event B. Mathematically, it can be represented
as:
P(A|B) * P(B)

QN=18 Jake woke up late in the morning on the day that he has to
go to school to take an important test. He can either take the
shuttle bus which is usually running late 20% of the time or
ride his unreliable motorcycle which breaks down 40% of the
time. He decides to toss a fair coin to make his choice.

If Jake, in fact, gets to the test on time, what is the

probability that he rode his bike?
a. 0.43
b. 0.57
c. 0.39
d. 0.61
ANSWER: A
MARK: 1
UNIT: 4.4
LO:
MIX CHOICES: Yes

18/ B=be the event that Jake rode his bike

S=be the event that Jake got to the test on time
Find P(B|S)?
Ω=100%
The probability of getting to the test on time given that he rode his bike= 60 ÷
100= 0.6
The probability of Jake riding his bike (since he is tossing a fair coin to
decide)=50 ÷ 100 = 0.5
The probability of getting to the test on time if he takes the shuttle (since it is
usually running late 20% of the time) = (100-20) ÷ 100= 0,8
The probability of his bike breaking down is = 40 ÷ 100 = 0.4
P(S)= P(S|taking shuttle) * P(taking shuttle) + P(S|riding bike) * P(riding bike)
= 0.8 x.0.5 + 0.6 x 0.5 = 0.7
P(B|S) = P(S|B) .P(B) ÷ P(S)
= 0.6 x 0.5 ÷ 0.7 = 0.43

QN=19 At the International Pancakes Hut, there are 4 different ways

to have an egg cooked, 7 different choices of pancakes, 5
different types of syrups and 8 different beverages. How
many different ways are there to order an egg, a pancake
with a choice of syrup and a beverage?
a. 1,120
b. 25
c. 980
d. 42
e. None of the other choices is correct
ANSWER: A
MARK: 1
UNIT: 4.5
LO:
MIX CHOICES: Yes

19/ Possible pancake-syrup combinations= 7x 5=35

8 different beverages
The total number of ways to order an egg, a pancake with a choice of syrup
and a beverage is:
4 × 35 × 8 = 1,120

QN=20 (See picture)

[file:16094.jpg]
 a. $520
b. $637
c. $650
d. $780
e. None of the other choices is correct
ANSWER: B
MARK: 1
UNIT: 5.1
LO:
MIX Yes
CHOICES:

20/ (Expected cost of 100 rats = (0.35 × $10.00) + (0.40 × $12.50) + (0.25 ×
$15.00) =$12.25
To find the budget for next year's rat orders, we need to multiply the expected
cost of 100 rats by the number of weeks in a year and the number of orders per
week
Budget = $12.25 x 100 x 52 =$63700

QN=21 A certain type of new business succeeds 60% of the time.

Suppose that 3 such businesses open (where they do not
compete, so it is reasonable to believe that their relative
successes would be independent).
 The probability that all 3 businesses succeed is ________
a. 0.216
b. 0.364
c. 0.784
d. 0.636
ANSWER: A
MARK: 1
UNIT: 5.2
LO:
MIX CHOICES: Yes

21/ Ω=100%
The probability that a new business succeeds = 60 ÷ 100=0.6
->The probability that it fails =0.4
P(3 businesses succeed)= P(success) x P(success) x P(success) = 0.6 x 0.6 x
0.6=0.216

QN=22 The number of power outages at a nuclear power plant has a

Poisson distribution with a mean of 6 outages per year. The
probability that there will be at least 3 power outages in a
year is____________
a. 0.938
b. 0.062
c. 0.745
d. 0.255
ANSWER: A
MARK: 1
UNIT: 5.3
LO:
MIX CHOICES: Yes

22/ Gọi X là số lần mất điện trong một năm

P(X ≥ 3) = 1 - P(X < 3)

QN=23 (See picture)

[file:16109.jpg]

a. 67,460,000
b. 75,240,000
c. 80,530,000
d. 82,170,000
e. None of the other choices is correct
ANSWER: A
MARK: 1
UNIT: 5.4
LO:
MIX Yes
CHOICES:

23/
QN=24 Assume that Z scores are normally distributed with a mean of
0 and a standard deviation of 1. If P(Z > c)=0.1093, find c.

Let

P(Z < -1.23) = 0.1093, P(Z < 0.27) = 0.6064,

P(Z < 0.45) = 0.6736, P(Z < 1.23) = 0.8907.
a. 1.23
b. 0.45
c. -1.23
d. 0.27
e. None of the other choices is correct
ANSWER: A
MARK: 1
UNIT: 6.2
LO:
MIX CHOICES: Yes

24/ P(Z > c)=0.1093

P(Z > c)=1 - P(Z > c)= 1- 0.1093 = 0.8907
Với 0.1093 xấp xỉ 0.8907 từ Bảng Z
➔ C= 1.23

QN=25 If Z is a standardized normal variable, find the probability P(Z

> 0.59).

Let P(Z < 0) = 0.5, P(Z < 0.59) = 0.7224, P(Z < 0.77) = 0.7810.

a. 0.2190
b. 0.2776
c. 0.7224
d. 0.2224
e. None of the other choices is correct
 ANSWER: B
MARK: 1
UNIT: 6.2
LO:
MIX CHOICES: Yes

25/ P(Z > 0.59) = 1 - P(Z < 0.59)

= 1 - 0.7224 = 0.2776

QN=26 (See picture)

[file:16134.jpg]

a. 0.750
b. 0.500
c. 0.875
d. 0.625
ANSWER: A
MARK: 1
UNIT: 6.4
LO:
MIX CHOICES: Yes

26/ Area = P(X < 6 ) = 0.125 x 6= 0,75