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Lesson 26 Feb IVNotes

This document provides an overview of computing statistics like mean, standard deviation, and expected value for discrete probability distributions. It discusses how to calculate the mean and standard deviation of a discrete probability distribution by using the distribution table. It also explains how to interpret these statistics and how expected value relates to the mean. Examples are provided for calculating mean and standard deviation of given distributions and for setting up a distribution to analyze an expected gain/loss scenario.

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24 views

Lesson 26 Feb IVNotes

This document provides an overview of computing statistics like mean, standard deviation, and expected value for discrete probability distributions. It discusses how to calculate the mean and standard deviation of a discrete probability distribution by using the distribution table. It also explains how to interpret these statistics and how expected value relates to the mean. Examples are provided for calculating mean and standard deviation of given distributions and for setting up a distribution to analyze an expected gain/loss scenario.

Uploaded by

Robert
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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Math Tech IIII, Feb 26

Mean, Standard Deviation, and Expected Value


of Discrete Probability Distributions
Book Sections: 4.1
Essential Questions: How can I compute the probability of any event?
How do I compute and interpret mean, standard deviation and
expected value of a discrete probability distribution?

Standards: DA-5.10, DA-4.3, S.MD.1, .2, .3


Discrete Probability Distributions
• Discrete probability distribution – a table list all
possible values of a random variable and the
probability of that value occurring, and satisfying
the following conditions:

0 ≤ P(x) ≤ 1

 P(x)  1
Computing Statistics
• We can compute the mean and standard deviation
of a random variable, using the distribution table.
• This is a distribution and not a sample, we will
now call mean by another name, μ, and standard
deviation by σ (mu and sigma).

In here, we’re
just going to let
Texas handle this
end of it.
Discrete Probability Distributions
• In a discrete probability distribution the mean is
equal to the expected value of the distribution.

• Often, these terms are used interchangeably.


Calculator Computations
• We load all x values into L1 and all P(x) values in
L2, and do 1-var stat computations on both lists.
 Looks like: 1-Var Stats L1, L2

Using Calculator statistics


Name Symbol Look for on Calculator
Mean μ X
Standard Deviation σ σx
Example 1

Compute the mean and standard deviation of the following


discrete probability distribution:

x 0 1 2 3 4 5

P(x) 0.69 0.20 0.08 0.02 0.01 0.01

μ=

σ=
Example 2

Find the mean and standard deviation of the following discrete


probability distribution:

x 4 6 8 10 12 15

P(x) 0.31 0.10 0.22 0.07 0.18 0.12

μ=

σ=
Interpreting Statistics + 1
• The mean of a random variable is what you
would expect to happen over thousands of
trials

• The Expected value of a distribution is equal to


the mean of the distribution
• In a game situation, an expected value of 0
implies a fair game
• In a profit-loss analysis (or situation), an
expected value of 0 is the break even point
• A negative value gives you an expected loss
• A positive value gives you an expected gain
Creating a Distribution for a Situation

• To accomplish a gain-loss scenario, you can


create a probability distribution for the gains
and compute the mean. From this, you will
know expected gain (or loss if negative)

• Follow the next example, it is a template for all


such examples:
Example
At a raffle, 1500 tickets are sold at $2 each for four prizes of
$500, $250, $150, and $75. If you buy 1 ticket, what is your
expected gain. (Ans: The expected value of some distribution)
Example
At a raffle, 1500 tickets are sold at $2 each for four prizes of
$500, $250, $150, and $75. If you buy 1 ticket, what is your
expected gain. (Ans: The expected value of some distribution)

Here is the discrete probability distribution for this situation. We


will load it into the calculator, as is.

Gain, x $498 $248 $148 $73 -$2 μ=


1 1 1 1 1496
P(x) 1500 1500 1500 1500 1500
Gain-Loss – Another Spin

• You can also compute the mean directly in a


gain-loss situation. This technique is especially
good if there are only 2 possible outcomes. It
will work for more, but gets more cumbersome.

• Expected value = x1·P(x1) + x2 ·P(x2)


Another Pivotal Example
A ball club makes $450,000 when it does not rain.
It also loses $250,000 when there is a rain out. If
the probability of it raining is .32, find the
expectation of profit?
Classwork: Handout CW 2/26, 1-6

Homework – None

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