CHAPTER 1.

PROBABILITY

I. Solution Steps

+ Step 1: Define the events from the problem.

+ Step 2: Define the probabilities and conditional probabilities for the events defined in Step 1.

+ Step 3: Find the system of events which is both mutually exclusive and collectively exhaustive (compute the complement if needed).

+ Step 4: Apply the formula.

II. Probability rules

1. Complement rule: .

2. Addition rule: .

In particular, if are mutually exclusive, then .

3. Conditional probability: .

4. Multiplication rule:

Events are said to be statistically independent if and only if .

5. Total probability:

Given the system of events that are both mutually exclusive and collectively exhaustive, then

or
 CHAPTER 2. DISCRETE RANDOM VARIABLES

I. Distribution table

Given the distribution table:

X x1 x2 …. xn

P p1 p2 …. pn

Then

1. .

2. .

3. .

4. .

In particular, if then .
II. Binomial Distribution

Suppose that

 a random experiment can result in two possible outcomes, “success” and “failure,”
 and that p is the probability of a success in a single trial.

Let X be the the number of resulting successes in n independent trials.

The probability distribution of X is called binomial distribution.

III. Poisson Distribution

Let X be the number of occurrences in a given continuous interval (such as time, surface area, or length). Then the probability distribution
of X is called the Poisson distribution.
 CHAPTER 3. CONTINUOUS RANDOM VARIABLES

I. Density Function

Given the density function of a continuous random variable . Then

i)

ii)

iii)

iv)

v)

vi)
II. Normal Distribution

If follows the normal distribution with the mean and variance , then

The values of can be found in Appendix Table 1 with the notices

i) .

ii)

iii)

Moreover, if and , then also follows the normal distribution

 CHAPTER 4. SAMPLING DISTRIBUTION

Let the random variables denote a random sample from a population.

I. Sample mean

- Sample mean: .

- If the parent population distribution is normal (or ) then

or .

II. Sample proportion

- Sample proportion:

where is the sample size and is the number of objects having the characteristic of interest.

- When n is large ( ), we have

or
III. Sample variance

- Sample variance: .

- If the parent population distribution is normal then

 CHAPTER 5. CONFIDENCE INTERVAL ESTIMATION

I. Formulas

Confidence Interval Estimation with the sample n and the confidence level
Population mean Population mean Population proportion Population variance
Given Given Given Given
Estimation
+ n is large
for + (or n is + (or n is +
large) large)
+ is known + is unknown
Confidenc
e interval

Margin of
error

Width

Upper
confidence
limit
Lower
confidence
limit
II. Critical values

1. Critical values for the standard normal distribution:

is a value such that

Some critical values:

Given the critical value , we can determine the significant level (or confidence level ) by the following formula

where can be found in Appendix Table 1.

2. Critical values for the Student’s t distribution

is a value such that

The value can be found in Appendix Table 8.

3. Critical values for the Chi-squared distribution

is a value such that

The value can be found in Appendix Table 7a and 7b.

 CHAPTER 6. HYPOTHESIS TESTS

I. Solution steps

+ Step 1: State the null and alternative hypotheses.

+ Step 2: Summarize all information.

+ Step 3: Decision rule: reject if …… (Formula)

+ Step 4: Random sample => conclusion

II. Decistion rule

For population mean

(or n is large) Reject if

Reject if Reject if
is known
or

(or n is large) Reject if

Reject if Reject if
is unknown
or
For population
proportion
Reject if Reject if
Reject if

or

For population
variance

Reject if
Reject if Reject if

or