Introduction to probability, Applied Statistics

Introduction to Probability

A student is considering whether she should enroll in an MBA educational program offered by a well-known college. Among other things, she would like to know how difficult the program is she obtains the following marks distribution of students who appeared for the most final examination in the previous year.

Relative Frequency Distribution

Marks %

No. of students

% of students

0   - 25

 45

 8

25 - 50

280

50

50 - 75

205

37

75 - 100

30

 5

 

560

100

Assuming the next exam is equally tough and there are same proportion of dull and bright students, she may conclude that the percentage of students in the four classes of marks will again be

Marks %

% of students

0   - 25

8

25 - 50

50

50 - 75

37

75 - 100

5

 

100

The first distribution above is related to past data and is a frequency distribution. The second distribution has the same numbers and is a copy of the first distribution. However, this distribution relates to the future. Such a distribution is called a probability distribution. Note the similarity of this distribution with that of the relative frequency distribution.

Hence by inspecting the probability distribution we can say that:

8% of the students who are appearing for the exam will score 0 - 25% marks, 50% will score 25 - 50% marks, 37% will score 50 - 75% marks and the balance 5% will score 75 - 100% marks.

If our student considers herself to be among the top 5% of the students, she can conclude that she will score 75 - 100% marks. If she considers herself to be in the top 42% of students she can conclude that she will score 50 - 100% marks and so on. However, if she has no idea of her ability in relation to the other students she can conclude that:

She has an 8% chance of scoring 0 - 25% marks, a 50% chance of scoring
25 - 50% marks, a 37% chance of scoring 50 - 75% marks and a 5% chance of scoring 75 - 100% marks. This "chance" is called probability in statistical language.

Probability theory is used to analyze data for decision making.

The insurance industry uses probability theory to calculate premium rates. A stock analyst/investor, based on the probability estimates of economic scenarios and estimates the returns of the stocks. A project manager applies probability theory in decision-making.

Posted Date: 9/14/2012 4:08:30 AM | Location : United States







Related Discussions:- Introduction to probability, Assignment Help, Ask Question on Introduction to probability, Get Answer, Expert's Help, Introduction to probability Discussions

Write discussion on Introduction to probability
Your posts are moderated
Related Questions
Grouped data  For grouped data, the formula applied is  σ = Where f = frequency of the variable, μ= population mea

If the sample size is less than 30, then we need to make the assumption that X (the volume of liquid in any cup) is normally distributed. This forces    (the mean volume in the sam

First we look at these charts assuming that we know both the mean and the standard deviation of the process, that is  μ and  σ . These values represent the acceptable values (bench

The management at Superior Health Care System Incorporated recently purchased several new facilities including the central patient information management center. This purchase will

i am new to stata and i am trying to figure out how to calculate expected growth of sales tax revenue as well as average growth rate of sales tax revenue in stata. I have a dataset

Main stages of Statistical Inquiry The following are the various stages of a statistical inquiry (1)   Planning the Inquiry: First of all we have to assess the problem und

Use the information given below to find the P-value. Also, use a 0.05 significance level and state the conclusion about the null hypothesis (reject the null hypothesis or fail to

Meaning of Interpolation and Extrapolation Interpolation is a method of estimating the most probable  missing figure on  the basis of given data under certain assumptions. On t

The Neatee Eatee Hamburger Joint specializes in soyabean burgers. Customers arrive according to the following inter - arrival times between 11.00 am and 2.00 pm: Interval-arrival

Framing of Questionnaire: Questionnaire is a schedule of questions which is sent to the respondents for filling in by them in their own handwriting together the information rel