Probability

Question 1

Probability distribution

Answer 1

List of all possible outcomes and their probability

Question 2

Cumulative probability distribution

Answer 2

Probability that a random variable is less than or equal to some value

Question 3

REVISE SUMMATION OPERATORS

Answer 3

(photo on phone or in notes)

Question 4

Why is standard deviation better than variance?

Answer 4

It is more interpretable becauase it has the same units as X

Question 5

Skewness

What does a high value of skewness mean?

Answer 5

The larger the skewness, the “fatter” the taile of one side of the distribution is relative to the centre of the distribution - lack of symmetry

Question 6

Kurtosis

What is shows and what a high value means

Answer 6

Measures how much of the dispersion is in the tails - essentially how much of the variability is driven by more extreme values relative to the mean - the larger the kurtosis the more likely there are extreme deviations from the mean.

Question 7

Law of large numbers

Answer 7

As n gets large, the sample average will be very close to the population mean with a very high probability ie. the sample average is a consistent estimator of the population mean when n is large.

Question 7

Central limit theorem

Answer 7

As n gets large the sample distribution is approximately normal.