Business Statistics Exam 3 Terms Flashcards
A method of assigning probabilities that is appropriate when all the experimental outcomes are equally likely
Classical Method
A process that generates well-defined outcomes
Probability Experiment
A method of assigning probabilities on the basis of judgment
Subjective Method
A method of assigning probabilities that is appropriate when data are available to estimate the proportion of the time the experimental outcome will occur if the experiment is repeated a large number of times
Relative Frequency Method
A graphical representation that helps in visualizing a multiple-step experiment
Tree Diagram
A graphical representation for showing symbolically the sample space and operations involving events in which the sample space is represented by a rectangle and events are represented as circles within the sample space
Venn Diagram
In an experiment we may be interested in determining the number of ways n objects may be selected among N objects without regard to the order in which the n objects are selected
Combination
In an experiment we may be interested in determining the number of ways n objects may be selected from among N objects when the order in which the n objects are selected is important
Permutation
The event containing all sample points belonging to or both
Union
A probability law used to compute the probability of the union of two events
Addition Law
Events that have no sample points in common
Mutually Exclusive Events
The event consisting of all sample points that are not in
Complement
The event containing the sample points belonging to both A and B
Intersection
Two events A and B where or ; that is, the events have no influence on each other
Independent Events
A probability law used to compute the probability of the intersection of two events. It is or . For independent events it reduces to
Multiplication Law
The probability of two events both occurring; that is, the probability of the intersection of two events
Joint Probability
The values in the margins of a joint probability table that provide the probabilities of each event separately
Marginal Probability
The probability of an event given that another event already occurred
Conditional Probability
Initial estimates of the probabilities of events
Prior Probabilities
Revised probabilities of events based on additional information
Posterior Probabilities
A method used to compute posterior probabilities
Bayes’ Theorem
A numerical description of the outcome of an experiment
Random Variable
A random variable that may assume either a finite number of values or an infinite sequence of values
Discrete Random Variable
A random variable that may assume any numerical value in an interval or collection of intervals
Continuous Random Variable
