Chapter 7 Notes

Chapter 7 Notes - Summary of Discrete Random Variables Two...

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Unformatted text preview: Summary of Discrete Random Variables Two types of random variables: Discrete random variables: random variables that can assume a countable number of values. o # of possible outcomes is finite can list them all (e.g. choose an integer between 1 and 5). o # of possible outcomes is countably infinite (e.g. choose any positive integer) Continuous random variables: Random variables that can assume values corresponding to any of the points contained in one or more intervals. e.g. height, weight, choose any number on the real number line between 1 and 5. Requirements for the probability Distribution of a Discrete Random Variable x 1. 0 P(x) 1 for all values of x 2. ( ) =1 Two t ypes of calculation problems for this chapter: Type I: General discrete random variable problems Normally, for this type of problems, you need to first form the probability table based on problem description (sometimes the problem will provide you the table) Type of questions maybe asked: 1. Calculate different types of probability (P(X=x), P(Xx), P(X<x), P(Xx) or P(X>x)), all the probabilities can be calculated based on the probability table 2. Calculate expected value. Sometimes, you may need to use the laws of expected values to calculate various forms of expected values, like the profit example in the book. E(X) = = ( ) 3. Calculate variance or standard deviation. Sometimes, you may need to use the laws of variance to calculate various forms of variance, like the profit example in the book....
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This note was uploaded on 11/16/2011 for the course ECON 202 taught by Professor Kim during the Fall '11 term at CSU Fullerton.

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Chapter 7 Notes - Summary of Discrete Random Variables Two...

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