Module 5 - Discrete Distributions Flashcards
Define random variable?
A function that assigns a numerical value to each simple event in a sample space.
What is a random variable that can assume only a countable number of values (finite or infinite)?
Discrete random variable
What is a random variable that can assume an uncountable number of values?
Continuous random variable
Define expected values?
The sum of all possible values a random variable can take times the corresponding probabilities
Define variance?
it measures how far a set of numbers are spread out from their average value.
Define standard deviation?
The standard deviation is a statistic that measures the dispersion of a dataset relative to its mean
Define bivariate distributions?
Joint probability distribution of two variables
What is the objective of decision analysis?
to select the optimal act from a list of alternative acts.
What are the 3 formats for presenting decision anlysis?
Payoff Table
Opportunity Loss Table
Decision Tree
Define alternative acts?
Possible choices of a decision maker.
What is EMV?
Expected monetary value
What is EOL?
Expected opportunity loss
What is EVPI?
Expected value of perfect information
Define a decision tree?
a graphical representation of decision problem
