Business Statistics

Question 1

Events

Answer 1

Are just collections of outcomes

Question 2

Null event

Answer 2

Event with no outcome

Question 3

Random variable

Answer 3

A number we are not sure about, but have some idea of how to describe its possible values

Question 4

P(A)

Answer 4

Probability that event A occurs

Question 5

Four rules of probability

Answer 5

1. If an event A is certain to occur, it has probability 1, denoted P(A) = 1
2. P(A does not occur) = 1 - P(A)
3. If two events A and B are mutually exclusive, then P(A or B) = P(A) + P(B)
4. P(A and B) = P(A)P(B|A) = P(B)P(A|B)

Question 6

Mutually exclusive events

Answer 6

Have no outcomes in common. They both cannot occur

Question 7

P(A|B)

Answer 7

Conditional probability of A given B

Question 8

Two events are independent if

Answer 8

P(A|B) = P(A)

Question 9

If A and B are independent, P(A and B) =

Answer 9

P(A)P(B)

Question 10

Something is a discrete random variable if

Answer 10

We are able to list all of the possible outcomes

Question 11

Binary/Bernoulli random variables

Answer 11

Simplest possible random variable takes on one of two values (0 and 1)

Question 12

Joint probability

Answer 12

P(A and B): I don’t know if either event has occurred

Question 13

Conditional probability

Answer 13

P(A|B): I know for sure that B has occurred or will occur

Question 14

Marginal probability

Answer 14

P(A) and P(B)

Question 15

Joint probability table

Answer 15

Describes all possible joint probabilities between the two random variables. Summing each row or column gives the corresponding marginal probability