Unit 4

Probability
Hamza Alduraidi
 Probability
Probability theory developed from the
study of games of chance like dice and
cards. A process like flipping a coin,
rolling a die or drawing a card from a
deck is called a probability
experiment. An outcome is a specific
result of a single trial of a probability
experiment.

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 Probability
distributions
 Probabilitytheory is the foundation for
statistical inference. A probability
distribution is a device for indicating
the values that a random variable may
have.
 There are two categories of random
variables. These are:
 discrete random variables, and
 continuous random variables.
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Discrete Probability
Distributions
 Binomial distribution – the random variable
can only assume 1 of 2 possible outcomes.
There are a fixed number of trials and the
results of the trials are independent.
 i.e. flipping a coin and counting the number of heads in
10 trials.
 Poisson Distribution – random variable can
assume a value between 0 and infinity.
 Counts usually follow a Poisson distribution (i.e. number
of ambulances needed in a city in a given night)

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 Discrete Random Variable
 A discrete random variable X has a finite number of possible
values. The probability distribution of X lists the values and
their probabilities.
Value of X x1 x2 x3 … xk
Probability p1 p2 p3 … pk
1. Every probability pi is a number between 0 and 1.
2. The sum of the probabilities must be 1.
 Find the probabilities of any event by adding the probabilities
of the particular values that make up the event.

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Example
 The instructor in a large class gives 15% each of A’s and D’s,
30% each of B’s and C’s and 10% F’s. The student’s grade on
a 4-point scale is a random variable X (A=4).

Grade F=0 D=1 C=2 B=3 A=4

Probability 0.10 15. 30. 30. 15.
 What is the probability that a student selected at random will
have a B or better?
 ANSWER: P (grade of 3 or 4)=P(X=3) + P(X=4)
= 0.3 + 0.15 = 0.45

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Continuous Probability
Distributions
 When it follows a Binomial or a Poisson
distribution the variable is restricted to taking on
integer values only.
 Between two values of a continuous random
variable we can always find a third.
 A histogram is used to represent a discrete
probability distribution and a smooth curve called
the probability density is used to represent a
continuous probability distribution.

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Continuous
Variable
A continuous probability
distribution is a probability density
function.
 The area under the smooth curve is
equal to 1 and the frequency of
occurrence of values between any two
points equals the total area under the
curve between the two points and the
x-axis.
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Normal Distribution
 Also called belt shaped curve, normal
curve, or Gaussian distribution.
 A normal distribution is one that is
unimodal, symmetric, and not too peaked
or flat.
 Given its name by the French
mathematician Quetelet who, in the early
19th century noted that many human
attributes, e.g. height, weight, intelligence
appeared to be distributed normally.
Normal Distribution
 The normal curve is unimodal and symmetric
about its mean ().
 In this distribution the mean, median and mode
are all identical.
 The standard deviation () specifies the amount
of dispersion around the mean.
 The two parameters  and  completely define a
normal curve.

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 Also called a Probability density function. The
probability is interpreted as "area under the
curve."
 The random variable takes on an infinite # of
values within a given interval
 The probability that X = any particular value
is 0. Consequently, we talk about intervals.
The probability is = to the area under the
curve.
 The area under the whole curve = 1.

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 Properties of a Normal
Distribution
It is symmetrical about  . .1
2. The mean, median and mode are all
equal.
3. The total area under the curve above
the x-axis is 1 square unit. Therefore
50% is to the right of and 50% is to
the left of .
4. Perpendiculars of:
±  contain about 68%;
±2  contain about 95%;
±3  contain about 99.7%
.of the area under the curve
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The normal distribution

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The Standard Normal Distribution
A normal distribution is
determined by  and . This creates
a family of distributions depending
on whatever the values of  and 
are.
 The standard normal distribution
has
=0 and  =1.
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 Score
 Thestandard z score is obtained by
creating a variable z whose value is

 Given the values of  and  we can

convert a value of x to a value of z and
find its probability using the table of
normal curve areas.
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Importance of Normal
Distribution to Statistics
 Although most distributions are not
exactly normal, most variables tend to
have approximately normal distribution.
 Many inferential statistics assume that the
populations are distributed normally.
 The normal curve is a probability
distribution and is used to answer
questions about the likelihood of getting
various particular outcomes when
sampling from a population.
Why Do We Like The Normal
?Distribution So Much
 There is nothing “special” about standard normal
scores
 These can be computed for observations from any
sample/population of continuous data values
 The score measures how far an observation is from
its mean in standard units of statistical distance
 But, if distribution is not normal, we may not be
able to use Z-score approach.

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Normal Distribution
Q Is every variable normally distributed?
A Absolutely not
Q Then why do we spend so much time
studying the normal distribution?
A Some variables are normally distributed;
a bigger reason is the “Central Limit
Theorem”!!!!!!!!!!!!!!!!!!!!!!!!!!!??????????
?

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Central Limit Theorem
 describes the characteristics of the "population of the
means" which has been created from the means of an
infinite number of random population samples of size (N),
all of them drawn from a given "parent population".
 It predicts that regardless of the distribution of the parent
population:
 The mean of the population of means is always equal to the
mean of the parent population from which the population
samples were drawn.
 The standard deviation of the population of means is always
equal to the standard deviation of the parent population
divided by the square root of the sample size (N).
 The distribution of means will increasingly approximate a
normal distribution as the size N of samples increases.
Central Limit Theorem
 A consequence of Central Limit Theorem is that if we
average measurements of a particular quantity, the
distribution of our average tends toward a normal one.
 In addition, if a measured variable is actually a
combination of several other uncorrelated variables, all of
them "contaminated" with a random error of any
distribution, our measurements tend to be contaminated
with a random error that is normally distributed as the
number of these variables increases.
 Thus, the Central Limit Theorem explains the ubiquity of
the famous bell-shaped "Normal distribution" (or "Gaussian
distribution") in the measurements domain.
Note that the normal distribution is
defined by two parameters, μ and σ . You
can draw a normal distribution for any μ
and σ combination. There is one normal
distribution, Z, that is special. It has a μ =
0 and a σ = 1. This is the Z distribution,
also called the standard normal
distribution. It is one of trillions of normal
distributions we could have selected.

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Standard Normal Variable
 It is customary to call a standard normal random
variable Z.
 The outcomes of the random variable Z are
denoted by z.
 The table in the coming slide give the area under
the curve (probabilities) between the mean and z.
 The probabilities in the table refer to the
likelihood that a randomly selected value Z is
equal to or less than a given value of z and
greater than 0 (the mean of the standard
normal).

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Table of Normal Curve Areas

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Standard Normal Curve

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Standard Normal
Distribution

50% of probability in 50% of probability in

here –probability=0.5 here–probability=0.5

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Standard Normal
Distribution
95% of
probability in
here

2.5% of probability 2.5% of probability

in here in here

Standard Normal
Distribution with 95% area
marked

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Calculating Probabilities
 Probability calculations are always
concerned with finding the probability that
the variable assumes any value in an
interval between two specific points a and
b.
 The probability that a continuous variable
assumes the a value between a and b is
the area under the graph of the density
between a and b.

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Finding Probabilities
(a) What is the probability that z < -
1.96?
(1) Sketch a normal curve
(2) Draw a line for z = -1.96
(3) Find the area in the table
(4) The answer is the area to the left
of the line P(z < -1.96) = .0250 29
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Finding Probabilities

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 Finding Probabilities
(b) What is the probability that -1.96 < z < 1.96?

(1) Sketch a normal curve

(2) Draw lines for lower z = -1.96, and

upper z = 1.96
(3) Find the area in the table corresponding to
each value
(4) The answer is the area between the values.
Subtract lower from upper:
P(-1.96 < z < 1.96) = .9750 - .0250 = .9500
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33
Finding Probabilities

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Finding Probabilities
(c) What is the probability that z > 1.96?
(1) Sketch a normal curve
(2) Draw a line for z = 1.96
(3) Find the area in the table
(4) The answer is the area to the right
of the line. It is found by subtracting the
table value from 1.0000:
P(z > 1.96) =1.0000 - .9750 = .0250

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Finding Probabilities

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If the weight of males is N.D. with μ=150
and σ=10, what is the probability that a
randomly selected male will weigh between
140 lbs and 155 lbs?
[Important Note: Always remember that the
probability that X is equal to any one
particular value is zero, P(X=value) =0,
since the normal distribution is continuous.]

Normal Distribution 37
Solution:

140 150 155 X

-1 Z
0 0.5

Z = (140 – 150)/ 10 = -1.00 s.d. from mean

Area under the curve = .3413 (from Z table)

Z = (155 – 150) / 10 =+.50 s.d. from mean

Area under the curve = .1915 (from Z table)

Answer: .3413 + .1915 = .5328

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 Example
 For example: What’s the probability of getting a math SAT score of 575 or less, =500 and =50?

575  500
Z 1.5
50
i.e., A score of 575 is 1.5 standard deviations above the mean
575 1 x  500 2 1.5 1
1  ( ) 1  Z2
 P ( X 575)  (50)
200
2
e 2 50 dx   

2
e 2 dz

Yikes!
But to look up Z= 1.5 in standard normal chart (or enter
into SAS) no problem! = .9332
If IQ is ND with a mean of 100 and a S.D. of 10,
what percentage of the population will have
(a)IQs ranging from 90 to 110?
(b)IQs ranging from 80 to 120?
Solution:
Z = (90 – 100)/10 = -1.00
Z = (110 -100)/ 10 = +1.00
Area between 0 and 1.00 in the Z-table is
.3413; Area between 0 and -1.00 is also .3413
(Z-distribution is symmetric).
Answer to part (a) is .3413 + .3413 = .6826.

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 (b)IQs ranging from 80 to 120?
Solution:
Z = (80 – 100)/10 = -2.00
Z = (120 -100)/ 10 = +2.00
Area between =0 and 2.00 in the Z-table is
.4772; Area between 0 and -2.00 is
also .4772 (Z-distribution is symmetric).
Answer is .4772 + .4772 = .9544.

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Suppose that the average salary of college
graduates is N.D. with μ=$40,000 and
σ=$10,000.
(a) What proportion of college graduates will earn
$24,800 or less?
(b) What proportion of college graduates will earn
$53,500 or more?
(c) What proportion of college graduates will earn
between $45,000 and $57,000?
(d) Calculate the 80th percentile.
(e) Calculate the 27th percentile.
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(a) What proportion of college graduates
will earn $24,800 or less?
Solution:
Convert the $24,800 to a Z-score:
Z = ($24,800 - $40,000)/$10,000 = -1.52.
Always DRAW a picture of the distribution to
help you solve these problems.

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 .4357

$24,800 $40,000 X

-1.52 0 Z

First Find the area between 0 and -1.52 in the

Z-table. From the Z table, that area is .4357.
Then, the area from -1.52 to - ∞ is
.5000 - .4357 = .0643.
Answer: 6.43% of college graduates will earn
less than $24,800.

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(b) What proportion of
college graduates will earn .4115
$53,500 or more? .0885
Solution: $40,000 $53,500

Convert the $53,500 to a Z-score. 0 +1.35 Z

Z = ($53,500 - $40,000)/$10,000 = +1.35. Find
the area between 0 and +1.35 in the Z-
table: .4115 is the table value.
When you DRAW A PICTURE (above) you see
that you need the area in the tail: .5 - .4115
- .0885.
Answer: .0885. Thus, 8.85% of college
graduates will earn $53,500 or more.

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 .4
55
4
.1915
(c) What proportion of college
graduates will earn between
$45,000 and $57,000? $40k $45k $57k

0 .5 1.7 Z

Z = $45,000 – $40,000 / $10,000 = .50

Z = $57,000 – $40,000 / $10,000 = 1.70

From the table, we can get the area under the

curve between the mean (0) and .5; we can get
the area between 0 and 1.7. From the picture we
see that neither one is what we need.
What do we do here? Subtract the small piece
from the big piece to get exactly what we need.
Answer: .4554 − .1915 = .2639

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Parts (d) and (e) of this example ask you to
compute percentiles. Every Z-score is
associated with a percentile. A Z-score of 0
is the 50th percentile. This means that if
you take any test that is normally
distributed (e.g., the SAT exam), and your
Z-score on the test is 0, this means you
scored at the 50th percentile. In fact, your
score is the mean, median, and mode.

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(d) Calculate the 80th percentile.

.5000 .3000

Solution:
First, what Z-score is associated $40,000

with the 80th percentile? 0 .84 Z

A Z-score of approximately +.84 will give you

about .3000 of the area under the curve. Also, the
area under the curve between -∞ and 0 is .5000.
Therefore, a Z-score of +.84 is associated with the
80th percentile.

Now to find the salary (X) at the 80 th percentile:

Just solve for X: +.84 = (X−$40,000)/$10,000
ANSWER
X = $40,000 + $8,400 = $48,400.

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(e) Calculate the 27th percentile.

.2300 .5000

Solution: First, what Z-score is associated

.2700

with the 27th percentile? A Z-score $40,000

of approximately -.61will give you -.61 0 Z

about .2300 of the area under the curve, with .2700 in

the tail. (The area under the curve between 0 and -.61
is .2291 which we are rounding to .2300). Also, the area
under the curve between 0 and ∞ is .5000. Therefore, a
Z-score of
-.61 is associated with the 27th percentile.

Now to find the salary (X) at the 27thANSWER

percentile:
Just solve for X: -0.61 =(X−$40,000)/$10,000
X = $40,000 - $6,100 = $33,900

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