As x is a random variable indicating no.

of months a person is unemployed

Thus,
X = 1,2,3,4,5,6,7,8,9,10
a)

Discreet probability distribution

X
1
2
3
4
5
6
7
8
9
10

b)

f(X)
0.038146432
0.062502317
0.084114921
0.099165894
0.129267841
0.172455978
0.153660797
0.132974977
0.086190918
0.041519926

One of the important property of discreet probability distribution is that sum of the probabilities of

f(X1) + f(X2) + f(X3) f (X10) = 1

1
Thus, it satistfies the condition of discreet probability distribution.

is unemployed

Numer unemployed
1,029
1,686
2,269
2,675
3,487
4,652
4,145
3,587
2,325
1,120
26,975

tion is that sum of the probabilities of all possible values which is a radom variable "x" can assume, is always unity.

In this example, we have developed empirical discreet probability distribution for random variable.
As in this example, a radom variable i.e. no. of months persons are employed is a discreet variable, therefore we
have developed discreet probability distribution

One of the important property of discreet probability distribution is that sum of the
probabilities of all possible values which is a radom variable "x" can assume, is
always unity. Thus if we take sum of all probabilities of all posssible values, we will
get 1; hence it is a discreet prbability distribution

ion for random variable.

ed is a discreet variable, therefore we

ability distribution is that sum of the

radom variable "x" can assume, is
bilities of all posssible values, we will
ion

a) Probability distribution for owner occupied unit having water supply stoppage
No. of times

Owner Occupied

0
1
2
3
4 times or more

439
1100
249
98
120
2006

Probability distribution
x

f(x)

0
1
2
3
4

0.21884347
0.548354935
0.124127617
0.04885344
0.059820538
=

x*f(x)

x-

0 -1.182452642
0.5483549352 -0.634097707
0.2482552343 -0.934197408
0.146560319 -1.035892323
0.2392821535 -0.943170489

(x-)2
1.3982
0.4021
0.8727
1.0731
0.8896

1.1824526421 (Weighted sum of probabilities of the outcomes)

b)
Expected value = = 1.1824
Variance =

0.7404

c)
a) Probability distribution for renter occupied unit having water supply stoppage
No. of times
0
1
2
3
4 times or more

Renter Occupied
394
760
221
92
111

1578
Probability distribution
x

f(x)

0
1
2
3
4

0.249683143
0.481622307
0.140050697
0.058301648
0.070342205
=

x*f(x)

x-

0 -1.217997465
0.4816223067 -0.736375158
0.2801013942 -0.937896071
0.174904943 -1.043092522
0.2813688213 -0.936628644

(x-)2
1.484
0.542
0.880
1.088
0.877

1.2179974651 (Weighted sum of probabilities of the outcomes)

d)
Expected value = = 1.218
Variance =

0.880

e)

The expected value E(x) of 1.218 in case of water stoppages lasting for more than 6 hours in the past 3 months in
Occupied units. The variance of number of times in which water stoppage took place is also greater (0.880) in ca

In this example, we have developed probability distribution of random variable

units experienced water stoppage lasting 6 or more hours.

f(x)*(x-)2
0.3060
0.2205
0.1083
0.0524
0.0532
probabilities of the outcomes)

Expected value of a discreet random variable is the probability w

Variance is actually the average of square differences from the m

Same as in part a

f(x)*(x-)2
0.370
0.261
0.123
0.063
0.062
probabilities of the outcomes)

Same as in part b

han 6 hours in the past 3 months in Renter Occupied units is greater than expected value of 1.182 in case of Owner
place is also greater (0.880) in case of Renter Occupied units as compared to Owner Occupied units (0.740)

y distribution of random variable i.e. no. of times , owner occupied

more hours.

ndom variable is the probability weighted average of all possible values i.e. x*f(x)
of square differences from the mean i.e. f(x)*(x-)2

By means of expected value and variance, we have interpreted the conclusion as

mentioned in the solution.

have interpreted the conclusion as

In this case study, data suggests that it follows binomial distribution. (equal chances of success in given trial)
Size of sample = n = 10
Probability of success (p) = 0.4
Probability of failure (q) = 0.6

a) Probability that none of the appeal will be successful

Probability of (x) success can be found by nCx *(p^x) * (q^x)
P [X=0] = 10C0 * 0.4^0 * 0.6^10
0.0060466176

b) Probability that exactly one appeal will be successful

P [X=1] = 10C1 * (p^x) * (q^x)
= [ (0.4^1)*(0.6^9) ] * 10C1
0.04031

c) Probability that atleast two of the appeals will be successful

1 - 0.04031
0.96

d) Probability that more than half of appeals will be successful?

1- binomcdf(10, 0.4, 5)
0.1662

nces of success in given trial)

Here, we have used binomial distribution

outcomes, either success or failure. Prob
Formula we used is,
nCx *(p^x) * (q^x)
Where
n = Size of sample
(p) = Probability of success
(q) = Probability of failure

Here, we have used binomial distribution

Formula we used is,
nCx *(p^x) * (q^x)
Where
n = Size of sample
(p) = Probability of success
(q) = Probability of failure

Here we have used the formula:1 - (probability that exactly one of the ap

Here, we have used binomial distribution

1 - Binom Distribution (Number_s, Trial

ere, we have used binomial distribution. It is a distribution where each trial can only result in two possible
tcomes, either success or failure. Probability of success on every trial
rmula we used is,

Cx *(p^x) * (q^x)

= Size of sample
) = Probability of success
) = Probability of failure

ere, we have used binomial distribution. It is a distribution where there are equal chances of success in given trial
rmula we used is,

Cx *(p^x) * (q^x)

= Size of sample
) = Probability of success
) = Probability of failure

ere we have used the formula:(probability that exactly one of the appeal will be succesful)

ere, we have used binomial distribution formula built in excel

Binom Distribution (Number_s, Trials, Porbability, Cummulative)

a) Expected number of calls in one hour are 30.

b) Probability of 3 calls in one minute can be computed as:f (3) = [ (5 / 2 ) ^ 3 (e -5/2)] / 3!

0.213763017

c) Probability of no calls in a five minute period can be computed as:f (0) = [ (5 / 2 )^0 (e -5/2) ] / 0!
0.082084999

In this example, I have used Poisson probability distribution to determ

In this example, I have used Poisson probability distribution to determ

isson probability distribution to determine probability of (x) occurances I.e. 3 calls in an interval i.e. one minute.

isson probability distribution to determine probability of (x) occurances I.e. 0 calls in an interval i.e. five minutes.

ne minute.

ive minutes.

a) Probability density function gr

f(x)

3/20
1/10
1/20
### 120.00 130.00 140.00
Minutes

b) Probability that flight will be no more than 5 m

P (x130) = (1/20) * [ 130 - 120 ]

0.5
0.5

c) Probability that flight will be more than 10 min

P (x > 135) = (1/20) * [ 140 - 135 ]

0.25

d) Expected time flight

130

130 minutes

In this example, there is a concept of probability density

function. It is a function of continuous variable which
describes the relative likelihood of random variable to
take on a given value. The curve we have obtained in
graph is called probability density function.

The case study presented in this example use the concept

of uniform probability distribution because in this
distribution, all the intervals of same length on the
distribution's support are equally probable. As in the case
study, we have assumed that actual flight times are
uniformaly distributed between 120 and 140 minutes
As quote time by Delta Airlines is 125 minutes and we
have taken probability that flight will be no more than 5
minutes late, so 125 + 5 = 130 ; so by substracting it
from the initial point of uniform probability distribution
i.e. 120; we can get the probability that required flight
will not be more than 5 min late.

The case study presented in this example use the concept

of uniform probability distribution because in this
distribution, all the intervals of same length on the
distribution's support are equally probable. As in the case
study, we have assumed that actual flight times are
As quote time by Delta Airlines is 125 minutes and we
have taken probability that flight will be more than 10
minutes late, so 125 + 10 = 135 ; so by substracting it
from the last point of uniform probability distribution i.e.
140 (2 hours and 20 minutes) ; we can get the probability

Expected time flight can be calculated by taking the

average of initial and last point of uniform probability
distribution

It is a case study related to exponential probability distribution.

The mean of exponential function can be computed as :- 12 = 1 /
Thus, = 1 / 12
Cdf = f(x) = 1 - (1 / ( e^ .x))
= f (x) = 1 - (1 / e^x/12)

b) Probability that arrival time between vehicles is 12 seconds or less

f(12) = 1 - (1/ e ^ 12/12)
0.632120559

c) Probability that arrival time between vehicles is 6 seconds or less

f(6) = 1 - (1/ e ^ 6/12)
0.39346934

d) Probability of 30 or more seconds between vehicles arrival

1 - f (30) = 1 - (1 - (1 / e ^ 30/12) )
0.082084999

Here, we have used formula:Cdf = f(x) = 1 - (1 / ( e^ .x))

mean of exponential function can be computed as :- 12 = 1 /
As exponential distribution (e) has a mean of 12 sec and arrival time probability between vehicles
f(12) = 1 - (1/ e ^ 12/12)

Here, we have used formula:= f(x) = 1 - (1 / ( e^ .x))

mean of exponential function can be computed as :- 12 = 1 /
As exponential distribution (e) has a mean of 12 sec and arrival time probability between vehicles
f(6) = 1 - (1/ e ^ 6/12)
0.69881
12
0.45119
6
0.04979
30
Here, we have used formula:= f(x) = 1- (1 - (1 / ( e^ .x)))
As exponential distribution (e) has a mean of 12 sec , so mean of exponential function is:1 - f (30) = 1 - (1 - (1 / e ^ 30/12) )

ival time probability between vehicles is 12 or less, so-

val time probability between vehicles is 30 or more seconds , so :-

n of exponential function is:-

Exponential Probability Distribution

0.8
0.7

a)

0.6
0.5
0.4
0.3
0.2
0.1
0

10

15

20

25

In this example, we have graphed the density of exponential probabili

probability distribution actually tells us about the time between event
occure continuously and independantly at a constant average rate.

Probability Distribution

15

20

25

30

35

ed the density of exponential probability distribution. Exponential

tells us about the time between events in a prcess where events
ndantly at a constant average rate.

First, to solve this case study, we need to draw Normal Distribution Table. Then we need to convert the data into

a)

Z - Score = ( Value - Mean ) / Standard Deviation

= (20 - 14.4) / 4.4
1.272727273
Thus, P (Z > 1.27). Now if we look up 1.27 in Normal Distribution Table, we will find the value of 0.8980.
P (Z > 1.27) = 1 - 0.8980
0.102

b)

Z - Score = ( Value - Mean ) / Standard Deviation

= (10 - 14.4) / 4.4
-1
Thus, P (Z < 1.27). Now if we look up -1 in Normal Distribution Table, we will find the value of 0.1587.

c) Now in order to find out that how big the return would have to be to put a domestic stock fund in top 10%, we need to find a
is 1.28. So we can safely say, that a Z score of 1.28 corresponds to the top 10 % return on domestic stock fund.
Z - Score = ( Value - Mean ) / Standard Deviation
= (10 - 14.4) / 4.4
1.28 = (Value - 14.4) / 4.4
Value = (1.28*4.4)+14.4
20.03

Then we need to convert the data into Z score.

we will find the value of 0.8980.

will find the value of 0.1587.

ck fund in top 10%, we need to find a value in normal distrubution table which is closest to 0.9. It
domestic stock fund.

I have used this example by making use of Standard normal distribution table. The number of standard deviations from mean is
can convert a value to Standard Score i.e Z score by subtracting it from the mean and dividing it by standard deviation, which w

Same as above

Same as above

er of standard deviations from mean is also known as Z-score. We

iding it by standard deviation, which we did in the example.