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Chapter 6

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Chapter 6

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Chapter 6

The Normal Distribution


and Other Continuous
Distributions

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 1


Probability Distributions
Probability
Distributions
‫التوزيعات االحتمالية المتقطعة‬ ‫التوزيعات االحتمالية المستمرة‬

Discrete Continuous
Ch. 5 Probability Probability Ch. 6
Distributions Distributions
Normal ‫الطبيعي‬

Binomial ‫ذي الحدين‬

Student t
Poisson
Uniform
Exponential
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 2
Objectives
In this chapter, you learn:
 To compute probabilities from the normal distribution.

 To use the normal probability plot to determine whether a set of


data is approximately normally distributed.

 How to determine Student t values.

 To compute probabilities from the uniform distribution.

 To compute probabilities from the exponential distribution.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 3


Continuous Probability Distributions
 A continuous variable is a variable that can assume
any value on a continuum (can assume an
uncountable number of values):
 thickness of an item.
 time required to complete a task.
 temperature of a solution.
 height, in inches.

 We cannot list the possible values.

 The probability of each individual value is 0.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 4


Continuous Probability
Distributions Vary By Shape

• Symmetrical • Symmetrical • Right skewed


• Bell-shaped • Also known as • Mean > Median
• Ranges from Rectangular • Ranges from
negative to Distribution zero to positive infinity
positive infinity • Every value between
the smallest & largest
is equally likely
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 5
The Normal Distribution

 ‘Bell Shaped.’
 Symmetrical. .
f(X)
 Mean, Median and Mode are Equal.

 Location is determined by the


mean, μ. σ
 Spread is determined by the X
standard deviation, σ. μ

 The random variable has an infinite Mean


theoretical range: - to +. = Median
= Mode

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 6


The Normal Distribution

The normal distribution is described by two parameters:


its mean and its standard deviation . .

f(X) Changing μ shifts the


distribution left or right.

Changing σ increases
or decreases the
σ spread.

μ X

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 7


By varying the parameters μ and σ, we obtain
different normal distributions

 A and B have the same mean but different standard deviations:


B has a smaller standard deviation than A.
 A and C have the same standard deviation but different means.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 8


The Normal Distribution

 The formula for the normal probability density function


is: 2
1  (X μ) 
1   
2  
f(X)  e
2π

Where e = the mathematical constant approximated by 2.71828


π = the mathematical constant approximated by 3.14159
μ = the population mean
σ = the population standard deviation
X = any value of the continuous variable

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 9


The Standardized Normal Distribution
 Any normal distribution X (with any mean and
standard deviation combination) can be transformed
into the standardized normal distribution (Z).

 To compute probabilities for X we need to transform


X units into Z units.

 The standardized normal distribution (Z) has a mean


of 0 and a standard deviation of 1.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 10


The Standardized Normal Distribution
 X is a continuous random variable normally
distributed with a mean 𝜇 and a standard deviation
𝜎.
 By subtracting 𝜇 from X and dividing by 𝜎 we can a
standard normal random variable (Z):

X μ
Z transformation
Formula Z
σ
 The Z distribution always has mean = 0 and
standard deviation = 1.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 11


The Standardized Normal Distribution

 Also known as the “Z” distribution.


 Mean is 0.
 Standard Deviation is 1.

f(Z)

0 Z
 Values above the mean have positive Z-values.
 Values below the mean have negative Z-values.
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 12
The Standardized Normal Distribution

 The formula for the standardized normal probability


density function is:

1 (1/2)Z2
f(Z)  e

Where e = the mathematical constant approximated by 2.71828
π = the mathematical constant approximated by 3.14159
Z = any value of the standardized normal distribution

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 13


Example #1:
 If X is distributed normally with mean of 7 and
standard deviation of 2, the Z value for X = 11
is:

 This says that X = 11 is two standard deviations


above the mean of 7.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 14


Comparing X and Z units

 Note that the shape of the distribution is the same, only


the scale has changed. We can express the problem in
the original units of X or in standardized units (Z).

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 15


Finding Normal Probabilities

 Probability is measured by the area under the


curve. We need to convert X into Z to find this
probability.

f(X) P (a ≤ X ≤ b)
= P (a < X < b)

a b X
(Note that the probability of any individual value is zero.)

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 16


Probability as Area Under the Curve

 The total area under the curve is 1, and the curve is


symmetric, so half is above the mean, half is below.
f(X) P(   X  μ)  0.5
P(μ  X   )  0.5

0.5 0.5

μ X
P(   X   )  1.0
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 17
The Standardized Normal Table

 The Cumulative Standardized Normal table in the


textbook (Appendix table E.2, pages 771-772)
gives the probability less than a desired value of Z
(i.e., from negative infinity to Z).

Example:
P(Z < 2.00) = 0.9772 0.9772

0 2.00 Z

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 18


The Standardized Normal Table
(continued)

The column gives the value of


Z to the second decimal point.
Z 0.00 0.01 0.02 …

The row shows 0.0


the value of Z 0.1
to the first .. The value within the
decimal point. . table gives the
2.0 .9772 probability from Z =  
up to the desired Z
value.
2.0
P(Z < 2.00) = 0.9772
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 19
General Procedure for Finding Normal
Probabilities

 To find P(a < X < b) when X is distributed normally:

 Draw the normal curve for the problem in


terms of X.

 Translate X-values to Z-values.

 Use the Standardized Normal Table.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 20


Finding Normal Probabilities
 Let X represent the time it takes (in seconds)
to download an image file from the internet.
 Suppose X is normal with a mean of 18.0
seconds and a standard deviation of 5.0
seconds. Find P(X < 18.6).

X
18.0
18.6
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 21
Finding Normal Probabilities
 Let X represent the time it takes, in seconds to download
(continued)
an image file from the internet.
 Suppose X is normal with a mean of 18.0 seconds and a
standard deviation of 5.0 seconds. Find P(X < 18.6):

X  μ 18.6  18.0
Z   0.12
σ 5.0

μ = 18 μ=0
σ=5 σ=1

18 18.6 X 0 0.12 Z

P(X < 18.6) P(Z < 0.12)


AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 22
Solution: Finding P(Z < 0.12)

 Standardized Normal Probability P(X < 18.6)


Table (Portion) = P(Z < 0.12)
Z .00 .01 .02 0.5478
0.0 .5000 .5040 .5080

0.1 .5398 .5438 .5478


0.2 .5793 .5832 .5871
Z
0.3 .6179 .6217 .6255 0.00
0.12

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 23


Finding Normal Upper Tail Probabilities

 Suppose X is normal with mean 18.0


and standard deviation 5.0.
 Now Find P(X > 18.6).

X
18.0
18.6
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 24
Finding Normal Upper Tail Probabilities
(continued)

P(X > 18.6) = P(Z > 0.12) = 1 - P(Z ≤ 0.12)


= 1 - 0.5478 = 0.4522

0.5478
1.000 1.0 - 0.5478
= 0.4522

Z Z
0 0
0.12 0.12
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 25
Finding a Normal Probability Between Two
Values

 Suppose X is normal with mean 18.0 and


standard deviation 5.0. Find P(18 < X < 18.6).
Calculate Z-values:

X  μ 18  18
Z  0
σ 5
18 18.6 X
X  μ 18.6  18 0 0.12 Z
Z   0.12
σ 5 P(18 < X < 18.6)
= P(0 < Z < 0.12)

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 26


Solution: Finding P(0 < Z < 0.12)

 Standardized Normal Probability P(18 < X < 18.6)


Table (Portion): = P(0 < Z < 0.12)
= P(Z < 0.12) – P(Z ≤ 0)
Z .00 .01 .02 = 0.5478 - 0.5000 = 0.0478
0.0 .5000 .5040 .5080 0.0478
0.5000
0.1 .5398 .5438 .5478
0.2 .5793 .5832 .5871

0.3 .6179 .6217 .6255 Z


0.00
0.12
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 27
Probabilities in the Lower Tail

 Suppose X is normal with mean 18.0


and standard deviation 5.0.
 Now Find P(17.4 < X < 18).

X
18.0
17.4
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 28
Probabilities in the Lower Tail
(continued)

 Now Find P(17.4 < X < 18):


P(17.4 < X < 18)
= P(-0.12 < Z < 0) 0.0478
= P(Z < 0) – P(Z ≤ -0.12)
= 0.5000 - 0.4522 = 0.0478 0.4522

The Normal distribution is


symmetric, so this probability is
17.4 18.0 X
the same as P(0 < Z < 0.12). Z
-0.12 0

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 29


Exercise #1

Weights of students are normally distributed with a


mean of 55 kg and a standard deviation of 3 kg.

1- Find the probability that the weight of one


randomly selected student is less than 48 kg.
2- Find the probability that the weight of one
randomly selected student is more than 55 kg.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 30


Exercise #2
Qatari families spent an average of QR500 on monthly
dining in 2020. Assume that the amount spent on a
monthly dining is normally distributed and that the
standard deviation is QR20.
1- Find the median and mode of this distribution. Justify
your answer.
2- What is the probability that a randomly selected
family spent less than QR500?
3- What is the probability that a randomly selected
family spent between QR420 and QR620?
4- Between what two values will the 68 percent of the
amounts spent fall?
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 31
Finding the X value for a Known Probability

 Steps to find the X value for a known


probability:
1. Find the Z value for the known probability.
2. Convert to X units using the formula:

X  μ  Zσ

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 32


Finding the X value for a Known Probability
(continued)

Example:
 Let X represent the time it takes (in seconds) to
download an image file from the internet.
 Suppose X is normal with mean 18.0 and standard
deviation 5.0.
 Find X such that 20% of download times are less than
X.
0.2000

? 18.0 X
? 0 Z

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 33


Find the Z value for 20% in the Lower Tail

1. Find the Z value for the known probability


 Standardized Normal Probability  20% area in the lower
Table (Portion) tail is consistent with a
Z … .03 .04 .05 Z value of -0.84.

-0.9 … .1762 .1736 .1711


0.2000
-0.8 … .2033 .2005 .1977
-0.7 … .2327 .2296 .2266
? 18.0 X
-0.84 0 Z

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 34


Finding the X value

2. Convert to X units using the formula:

X  μ  Zσ
 18.0  (0.84)5.0
 13.8

 So 20% of the values from a distribution


with mean 18.0 and standard deviation
5.0 are less than 13.80.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 35


Evaluating Normality

 Not all continuous distributions are normal.


 It is important to evaluate how well the data set is
approximated by a normal distribution.
 Normally distributed data should approximate the
theoretical normal distribution:
 The normal distribution is bell shaped (symmetrical)
where the mean is equal to the median.
 The empirical rule applies to the normal distribution.
 The interquartile range of a normal distribution is 1.33
standard deviations. (Q3-Q1 ≈ 1.33*σ)

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 36


Evaluating Normality (continued)

 Comparing data characteristics to theoretical


properties:
 Construct charts or graphs:
 For small- or moderate-sized data sets, construct a boxplot to check for
symmetry.
 For large data sets, does the histogram or polygon appear bell-shaped?
 Compute descriptive summary measures
 Do the mean, median and mode have similar values?
 Is the interquartile range approximately 1.33σ?
 Is the range approximately 6σ?
 Evaluate normal probability plot:
 Is the normal probability plot approximately linear (i.e. a straight line) with
positive slope?

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 37


Constructing A Normal Probability Plot

 A normal probability plot is a visual display that helps


us evaluate whether the data are normally
distributed.

 One common plot is called the quantile–quantile


plot.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 38


Constructing A Normal Probability Plot
 How to construct a quantile-quantile plot
 First, arrange the variable's observed values in ascending
order.
 Second, arrange a rank order number (i) from 1 to n, where (i)
is the observed value’s position in the ordered list and n is the
total number of observed values.
 Third, calculate the cumulative probability (f) for each rank order
from1 to n values by using this formula:
f(i) = (i - 0.375) / (n + 0.25)
 Then, for each cumulative probability value, determine the
z-score from the standard normal distribution table.
 Finally, plot the variable's observed values on the vertical axis
and the corresponding z-scores on the horizontal axis.
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 39
The Normal Probability Plot: Interpretation
 The data are drawn against a theoretical normal
distribution in a manner that the points should form almost a
straight line.
 A normal probability plot for data from a normal distribution
will be approximately linear.
 Nonlinear plots indicate a deviation from normality.

Left-Skewed Normal Right-Skewed

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 40


The Normal Probability Plot
Interpretation
Example 1: The data in the table below is a random sample of 16
individuals’ wait times in the coffee shop. Is there evidence to
support the belief that the variable of waiting time follows a
normal distribution?

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 41


The Normal Probability Plot
Interpretation
Example 1:(continued)
(i) :f(i)

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 42


The Normal Probability Plot
Interpretation
Example 1:
(continued)
Normal Probability Plot
35

30

25

20
X

15

10

0
-2 -1.5 -1 -0.5 0 0.5 1 1.5 2
Z

 The normal probability plot is approximately linear. Hence we conclude


that wait time follows a normal distribution.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 43


Evaluating Normality: Mutual Fund Returns
(continued)
 Example 2: Excel normal probability plot for the Three-
Year Returns (stored in Retirement Funds.xls)

 The normal probability plot is approximately linear. Hence we conclude


that the three-year return follows a normal distribution.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 44


.

Student t Distribution
 Much like the standard normal distribution, the
Student t distribution is symmetrical about its
mean of zero:

 The mean and variance of a Student t random


variable are
E(t) = 0 (Mean is always zero)
and
V(t) = for ν > 2.
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 45
.

Student t Distribution
 In much the same way that µ and σ define the
normal distribution, ν, the degrees of freedom,
defines the Student t Distribution:

 As the number of degrees of freedom increases, the


t distribution approaches the standard normal
distribution.
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 46
.

Determining Student t Values…


 The Student t distribution is used extensively in
statistical inference. Table E.3 (page 773) lists
values of .

 That is, values of a Student t random variable


with degrees of freedom such that:

 The values for A are pre-determined


“critical” values, typically in the
10%, 5%, 2.5%, 1% and 0.5% range.
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 47
.

Using the t table for values…


 For example, if we want the value of t with 10
degrees of freedom such that the area to the right
of t curve is .05:
Area to the right of t is .05

t.05,10
t.05,10=1.812

Degrees of Freedom : ROW

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 48


Exercise #3
Find the value of 𝑡 such as:
1- P 𝑡 > 𝑡(0.05,12) = 0.05
2- P 𝑡 > 𝑡(0.01,12) = 0.01
3- P 𝑡 > 𝑡(0.05,20) = 0.05
4- P 𝑡 > 𝑡(0.10,20) = 0.10
5- P 𝑡 < 𝑡(0.95,12) = 0.95

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 49


The Uniform Distribution

 The uniform distribution is a probability


distribution that has equal probabilities
for all possible outcomes of the random
variable.

 Also called a rectangular distribution.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 50


The Uniform Distribution
(continued)
 The Continuous Uniform Distribution:

1
if a  X  b
ba
f(X) =

0 otherwise

where
f(X) = value of the density function at any X value.
a = minimum value of X.
b = maximum value of X.
AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 51
Properties of the Uniform Distribution

 The mean of the uniform distribution is:


ab
μ
2

 The standard deviation is:

(b - a)2
σ
12

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 52


Uniform Distribution Example

Example: Uniform probability distribution


over the range 2 ≤ X ≤ 6:

1
f(X) = 6 - 2 = 0.25 for 2 ≤ X ≤ 6

f(X)
ab 26
μ  4
0.25 2 2

(b - a)2 (6 - 2)2
σ   1.1547
X 12 12
2 6

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 53


Uniform Distribution Example

(continued)

Example: Using the uniform probability


distribution to find P(3 ≤ X ≤ 5):

P(3 ≤ X ≤ 5) = (Base)(Height) = (2)(0.25) = 0.5

f(X)

0.25

2 3 4 5 6 X

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 54


.

Exercise #4
A random variable (X) is uniformly distributed between 5
and 25.
a) Draw the density function.
b) Find P(X ≥ 26).
c) Find P(0 ≤ X ≤ 30).
d) Find P(X > 4).
e) Find P(X = 10).
f) Find P(10 ≤ X ≤ 15).
g) Find P(X ≥ 2).

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 55


Exercise #5
The time it takes for a plane to be cleaned and ready for
the next flight is uniformly distributed between 35 and
45 minutes. What is the probability that the cleaning
time will be

1- less than 37 minutes?


2- between 35 and 40 minutes?
3- more than 38 minutes?
4- Calculate the mean and the standard deviation for
the cleaning time of an airplane.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 56


The Exponential Distribution

 The Exponential Distribution is used to model times between events


or arrivals.
 λ is assumed to be the average rate of arrivals or occurrences of an
event in a given time interval.
 Statisticians have shown that the mean and standard deviation of an
exponential random variable are equal to each other: μ = σ = 1/λ.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 57


The Exponential Distribution

 The Continuous Exponential Distribution:

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 58


The Exponential Distribution
 The Continuous Exponential Distribution:

 The value of e−λx can be obtained with the aid of a


calculator.

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 59


The Exponential Distribution
Example:

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 60


The Exponential Distribution
Example:

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 61


The Exponential Distribution
Example:

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 62


Exercise #6
A company that receives most of its orders by telephone
conducted a study to determine how long customers were
willing to wait on hold before ordering a product. The length of
waiting time was found to be a variable best approximated by
an exponential distribution with a mean length of waiting time
equal to 3 minutes (i.e. the mean number of calls answered in a
minute is 1/3).

1- What is the probability that a randomly selected caller is


placed on hold more than 4.5 minutes?
2- What is the probability that a randomly selected caller is
placed on hold fewer than 7 minutes?

AL W AYS L E AR N I N G Copyright © 2020 Pearson Education Ltd. Slide 63

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