Scribd
Upload
12 views

Assignment#02

The document discusses continuous and discrete distributions. A continuous distribution describes probabilities of continuous random variables which have infinite possible values. A discrete distribution describes probabilities of discrete random variables which have countable values. Examples of continuous and discrete distributions are given using weight and customer complaints.

Uploaded by

safa
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
12 views

Assignment#02

The document discusses continuous and discrete distributions. A continuous distribution describes probabilities of continuous random variables which have infinite possible values. A discrete distribution describes probabilities of discrete random variables which have countable values. Examples of continuous and discrete distributions are given using weight and customer complaints.

Uploaded by

safa
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Introduction to Financial Management Assignment 02

Submitted By:
Safa Riasat
Sap 36622
BS-Accounting& Finance
(5th Semester)
Submitted To:
Mr. Khalid

Faculty of Management Sciences,


Riphah International University, Al-Mizan Campus, Rawalpindi
2023
Topic:
What is Continuous Distribution?

A continuous distribution describes the probabilities of the possible values of a continuous random
variable. A continuous random variable is a random variable with a set of possible values (known as the
range) that is infinite and uncountable.

Probabilities of continuous random variables (X) are defined as the area under the curve of its PDF. Thus,
only ranges of values can have a nonzero probability. The probability that a continuous random variable
equals some value is always zero.

Example of the distribution of weights

The continuous normal distribution can describe the distribution of weight of adult males. For example,
you can calculate the probability that a man weighs between 160 and 170 pounds.

Distribution plot of the weight of adult males

The shaded region under the curve in this example represents the range from 160 and 170 pounds. The
area of this range is 0.136; therefore, the probability that a randomly selected man weighs between 160
and 170 pounds is 13.6%. The entire area under the curve equals 1.0.
However, the probability that X is exactly equal to some value is always zero because the area under the
curve at a single point, which has no width, is zero. For example, the probability that a man weighs
exactly 190 pounds to infinite precision is zero. You could calculate a nonzero probability that a man
weighs more than 190 pounds, or less than 190 pounds, or between 189.9 and 190.1 pounds, but the
probability that he weighs exactly 190 pounds is zero.
What is a discrete distribution?

A discrete distribution describes the probability of occurrence of each value of a discrete random variable.
A discrete random variable is a random variable that has countable values, such as a list of non-negative
integers.

With a discrete probability distribution, each possible value of the discrete random variable can be
associated with a non-zero probability. Thus, a discrete probability distribution is often presented in
tabular form.

Example of the number of customer complaints

With a discrete distribution, unlike with a continuous distribution, you can calculate the probability that X
is exactly equal to some value. For example, you can use the discrete Poisson distribution to describe the
number of customer complaints within a day. Suppose the average number of complaints per day is 10
and you want to know the probability of receiving 5, 10, and 15 customer complaints in a day.

You can also view a discrete distribution on a distribution plot to see the probabilities
between ranges.
P (X =
x x)

5 0.037833

1 0.125110
0

Distribution plot of the number of customer complaints


1 0.034718
The shaded bars in this example represents the number of occurrences when the daily
customer complaints is 15 or more. The height of the bars sums to 0.08346; therefore, 5
the probability that the number of calls per day is 15 or more is 8.35%.

THANK YOU!

You might also like