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Random variable and Mathematical expectation

Random variable:A random variable is a functional value which represents the outcome
of random experiment with certain probability. A random variable's possible values
might represent the possible outcomes of a yet-to-be-performed experiment, or the
possible outcomes of a past experiment whose already-existing value is uncertain (for
example, as a result of incomplete information or imprecise measurements). They may
also conceptually represent either the results of an "objectively" random process (such
as rolling a die) or the "subjective" randomness that results from incomplete knowledge
of a quantity.(Ref: Wikipedia).

Discrete random variable: If a random variable represents only countable set of values
of a random experiment then it is called discrete random variable. For eg.if X denotes
number of student in MBA program then it is discrete random variable.

Continuous Random variable: If a random variable takes all possible values or

uncountable values in a certain range or measurable data set then it is called continuous
random variable. For eg if X denotes weight of student in MBA program then it is
continuous random variable.

Probability distribution

The mathematical function describing the possible values of a random variable and
their associated probabilities is known as a probability distribution.List of values of
random variable with corresponding probabilities is called probability distribution. If
random variable is discrete type then the probability distribution is discrete probability
distribution and if random variable is continuous type, the distribution is continuous
probability distribution.

For eg

Points of Probability
die(X) P(X)
1 1/6
2 1/6
3 1/6
4 1/6
5 1/6
6 1/6
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Probability mass function: It is a functional value which define the probability of value
of random variable and satisfies following properties and it is denoted by P(X=x) or
P(X) or Pi

1.Pi>=1 (Probability is non negative)

2. (Total probability is 1)

Note: If Random variable is continuous type then probability function is called

probability density function and denoted by f(x).

Mathematical expectation: It is a long run average which is denoted by E(X) or µ. If X is

a random variable which takes the values x1, x2………. xn with corresponding probabilities
P(x1) ,P(x2)…………P(xn) then mathematical expectation is

µ=E(X)=

Where xi= ith outcome of discrete random variable

P(xi)= probability of occurrence of ith outcome of X

Example: If X is a random variable which denotes points shown in rolling of a die find
expected value of X

Xi P(Xi) XiP(Xi)
1 1/6 1/6
2 1/6 2/6
3 1/6 3/6
4 1/6 4/6
5 1/6 5/6
6 1/6 6/6

E(X)= µ=E(X)= =21/6

Variance: V(X)= E(X2)-(E(X))2

E(X)= E(X2)=
and

Standard deviation=

Properties of Mathematical expectation:

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1.E(X+Y)=E(X)+E(Y)

2.E(XY)=E(X).E(Y) When X and y are two independent random variables.

3.E(ax)=aE(X) Where a is constant and X is Random variable

4.E(ax+b)=aE(x)+b

5.E(C )=C Where C is constant.

Properties of Variance:

1.V(C ) =0 Where C is constant

2. V(aX)= a2V(X) Where a is constant and X is a random variable.

3.V(ax+b)=a2V(x) Where a and b are constant and X is a random variable.

4.V(X+Y) = V(X)+V(Y) if X and Y are two independent random variables.

Exercise
1. Suppose the R.V. X can take the different values in the range 0 to 5 with
probability of occurrences as follows:
Value of X 0 1 2 3 4 5

Probabilit 0.05 0.05 0.25 0.3 0.25 0.1

y

Find the expected value and the variance of the random variable X.

2. Given the probability distribution of X as follows. Obtain the missing probability

corresponding to the value x = 3 of the given distribution and also find the value
of E(X) and V(X).
X : 1 2 3 4 5

P(X): 0.5 0.3 - 0.07 0.01

3. the number of hardware failures of a computer in a week of operation has the

following probability mass function
Number of families: 0 1 2 3 4 5 6

Probability : 0.18 0.28 K 0.18 0.06 2K 0.01

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a. Find the value of ‘K’.

b. Find the expected number of families in a week.
c. Find the variances of the number of failures in a week.
4. The following table contains the probability distribution of the number of traffic
accidents daily in a small city.
Accidents daily(X): 0 1 2 3 4 5

P(X): 0.10 0.20 0.45 0.15 0.05 0.05

Compute

a. the mean or expected number of accidents per day

b. The variance of the distribution.
5. Given the following probability distributions:

Distribution A Distribution B

X P(X) X
P(X)

0 0.50 0 0.05
1 0.20 1 0.10
2 0.15 2 0.15
3 0.10 3 0.20
4 0.05 4 0.50
a) Compute the expected value for each distribution.
b) Compute the standard deviation for each distribution.
c) Compare and contrast the results of distributions A and B.
6. The manager of a large computer network has developed the following
probability distribution of the number of interruptions per day
INTERRUPTIONS (X) P(X)

0 0.32
1 0.35
2 0.18
3 0.08
4 0.04
5 0.02
6 0.01
a) Compute the mean or expected number of interruptions per day.
b) Compute the standard deviation.
7. Given the following probability distributions for variables X and Y
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P(XiYi) X Y

0.2 -100 50

0.4 50 30

0.3 200 20

0.1 300 20

Compute

a. E(X)
b. E(Y)
c. Standard deviation and variance of the random variable X and Y
separately.
8. You are trying to develop a strategy for investing in two different stocks. The
anticipated annual return for a $1,000 investment in each stock has the following
probability distribution

Probability Stock X Stock Y

0.1 -$100 $50

0.3 0 150

0.3 80 -20

0.3 150 -100

Compute the

a. Expected return for stock X

b. Expected return for stock Y
c. Standard deviation for stock X
d. Standard deviation for stock Y
e. Which investment stocks X or Y do you prefer? Why?
9. A random variable x takes the values of the dice when a single dice is thrown.
Find the value of
a. E(X)
b. E(X2)
c. V(X)
d. V(5X+20)
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e. E(5X+20)

10. A random variable X is defined to be the difference between the higher value and
the lower value when two dice are thrown. If they have the same value, X is
defined to be zero.
Find

a) E (2X+10)

b) E(X2)

c) Standard deviation of X

11. A random variable X is defined to be the larger of the two values when two dice
are thrown or the value if the values are the same. Find
a) E (10X+5) b) E(X2)

c) Standard deviation of X.

12. Find the expected value and its variance of the sum of number of points on faces
of a dice when two dice are thrown.
13. The following table presents a discrete probability distribution associated with
the daily demand for a product

Number Demanded per Day P(x)

(X)

10 0.08
a. Determine the mean daily
20 0.24 demand.
b. What is the
30 0.28 standard
deviation of
40 0.30 daily
demand?
50 0.10 c. What is the
variance of
Total 1.00
daily
demand?
d. Calculate the coefficient of variation of daily demand.
14. A sociologist is studying the household composition in a tribal society and is
interested mainly in the number of pre-teen children in a household. It was
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found that 2% households don't have any children, 7% of the households have 1
child, 22% of the households have 2 children, 38% of the households have 3
children, and the remaining have 4 children each. Let the random variable X
represent the number of pre-teen children in a household selected at random.
Find the probability distribution of X. Calculate the mean and standard deviation
of X.
15. An investor has a certain amount of money available to invest now. Three
alternatives portfolio selections are available. The estimated profits of each
portfolio under each economic condition are indicated in the following table.
Portfolio Selection
Event A B C
Economy declines Rs. 500 -Rs. 2000 -Rs. 6000
No change 1000 2000 -1000
Economy 2000 5000 20000
expands
On the basis of his own past experience, the investor assigns the following
probabilities to eacheconomic condition:

P (economy declines) = 0.30

P (no change) = 0.50

P (economy expands) = 0.20

i) Determine the best portfolio selection for the investor according to the expected
value criterion.
ii) Compute the coefficient of variation for portfolios A, B and C.
iii) On the basis of the results of (i) and (ii), which would you choose; portfolio A,
B or C? Why?
16. An insurance salesman visits up to three clients each day, hoping to sell a new
policy. He stops for the day once he makes a sale. Each client independently
decides whether to buy a policy; 10% of clients purchase the policy.
a. Find the expected number of clients he visits in a day.
b. If the salesman spends about 2.5 hours with each client, then how many
hours should he expect to be busy each day
c. If the salesman earns $3,000 per policy sold, how much can he expect to
make per day?
17. Bob Walters, who frequently invests in the stock market, carefully studies any
potential investment. He is currently examining the possibility of investing the
trinity power company. Through studying past performance, Walters are broken
the potential results of the investment into five possible outcomes with
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accompanying probabilities. The outcomes are annual rates of return on a single

share of stock that currently costs $150.find the expected value of the return for
investing in a single share of Trinity Power.

Return on 0.00 10.00 15.00 25.00 50.00

investment($
)
Probability 0.20 0.25 0.3 0.15 0.10
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Discrete probability Distribution

1) Binomial distribution 2) Poisson Distribution

Binomial distribution
Bernoulli trial: When a trial provides only two possible outcomes, Success and failure
where probability of success is denoted by p and failure is denoted by q such that
p+q=1, then trial is known as Bernoulli trial.

Repetition of Bernoulli trial form a Binomial distribution. Let Bernoulli trial is repeated
n times then probability of (X=x) success out of n trial is calculated by using the
formula

P(X=x)=

Where p=Probability of success

q= Probability of failure

n= Number of trial

P+q=1

Above function if known as probability mass function of Binomial distribution.

Notation: We shall use the notation read as X is a random variable which

follows Binomial distribution with parameter n and p

Assumption of Binomial Distribution

1.outcomes of trial are dichotomous in nature i.e. trial results in only two possible
outcomes.

2.Trials are independent.

3.Probability of success p remains same from trial to trial

4.p+q=1

5.Number of trials are fixed or known

Characteristics of Binomial distribution

1.It is discrete probability distribution.

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2.Parameter of Binomial distribution are n and p

3.Mean of binomial distribution is np and variance of Binomial distribution is npq.

Poisson distribution:

Poisson distribution is also discrete probability distribution which is useful for

modeling certain real situations. It differs from the binomial distribution in the sense
that in the binomial distribution we must be able to count the number of successes and
number of failures, while in poison distribution, all we want to know the average
number of successes in a given unit of time or space. For example;

 Number of patients coming to the hospital for emergency treatment in a given hour
(where number of patients not coming for emergency treatment in that hour does
not have meaning)
 The arrivals of trucks and cars passing through New Road
 The telephone calls going though a switchboard system.
 The number of customer visits the certain bank for service during 1.00 pm. to 2.00
p.m.
In summary, in poison distribution only success is possible but not the failure

Characteristics (properties) of Poisson distribution:

1. The probability that exactly one event will occur in a very small time interval is very
small.
2. The probability that two or more events will occur in this small time period is also
small.
3. The number of occurrences of events in any interval is independent on the number
of occurrences of any other second interval.
Poisson formula

The probability that exactly X occurrences in a time a given time given as follows:

e−λ λ X
P(X) = X !

Where, e= Base to the natural logarithms and is equal to 2.71828…

λ =Average number of occurrence per unit of time.

Note: Mean of Poisson distribution is λ and variance Poisson distribution is also λ

.Parameter is also λ
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Example: Assume that on an average 3 persons enter the bank for service every 10
minutes. What is the probability that exactly 5 customers will enter the bank in a given
10 minutes period, assuming that the process can be described by a Poisson
distribution? (Answer: 0.1008)

Poisson distribution as an approximation of Binomial distribution

To avoid the tedious job of calculating Binomial distributions, we can use the Poisson
distribution. The Poisson distribution can be a reasonable approximation of Binomial
distribution under some certain conditions.

The conditions are

1. The number of trails (n) is indefinitely large (i.e. n →∞ ) [In general if n ¿ 20 ]

2. The probability of success (p) is indefinitely small (i.e. p →0 ) [In general if p ¿0 .05 ]

3. Assume np= λ ( λ = mean of the Poisson distribution)

Home assessment and Class work

1. At a particular university is has been found that 20% of the students withdraw
without completing the Business Statistics Course. Assume that 18 students have
registered for the course this semester.
a. What is the probability that none will withdraw?
b. What is the probability that at least one will withdraw?
c. What is the probability that at most 2 will withdraw?
2. Harley Davidson, director of quality control for the Kyoto Motor company, is
conducting his monthly spot check of automatic transmission. In this procedure,
10 transmissions are removed from the pool of components and are checked for
manufacturing defects. Historically, only 2% of the transmissions have such
flaws. (Assume that flaws occur independently in different transmission)
a) What is the probability that Harley’s sample contains more than two
transmissions with manufacturing flaws? Answer 0.0009
b) What is the probability that none of the selected transmission has any
manufacturing flaws? Answer 0.8171
3. Harry Ohme is in charge of the electronics section of a large department store.
He has noticed that the probability that a customer who is just browsing will buy
something is 0.3. Suppose that 15 customer browse in the electronics section each
hour.
a) What is the probability that at least one browsing customer will buy
something during a specified hour? Answer 0.9953
b) What is the probability that at least four browsing customers will buy
something during a specified hour? Answer 0.7032
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c) What is the probability that no browsing customer will buy anything during
a specified hour? Answer 0.0047
d) What is the probability that no more than four browsing customers will buy
something during a specified hour? Answer 0.5155
4. The bank of Katmandu has recently starts a new credit program. Customers
meeting certain credit requirements can obtain a credit card accepted by
participating area merchants that carries a discount. Past numbers show that 25%
of all applicants for this card are rejected. If 10 applicants are rejected, what is the
probability that
a. Exactly 4 will be rejected?
b. None of them are rejected?
c. At least two are rejected?
d. Less than three are rejected?

5. Determine the mean and standard deviation of the random variable X in each of
the following binomial distributions:
a) If n = 4 and p = 0.10
b) If n = 4 and p = 0.40
c) If n = 5 and p = 0.80
d) If n =3 and p = 0.50
6. Warranty records show that the probability that a new car needs a warranty
repair in the first 90 days is 0.05. If a sample of three new car is selected, what is
the probability that in the first 90 days
a) None needs a warranty repair
b) At least one needs a warranty repair
c) More than one needs a warranty repair
7. An important part of the customer service responsibilities of a telephone
company relates to the speed with which troubles in residential service can be
repaired. Suppose past data indicate that the likelihood is 0.70 that troubles in
residential service can be repaired on the same day. For the first five troubles
reported on a given day, what is the probability that
a) All five will be repaired on the same day?
b) At least three will be repaired on the same day?
c) Fewer than two will be repaired on the same day?
8. A fair coin is tossed ten times. Find the probability of obtaining
a) Exactly 4 heads (Ans 0.2051)
b) No heads (Ans. 0.0010)
c) At least one head (Ans.0.9990)
d) At most three heads (Ans. 0.1719)
e) More than 8 heads(Ans. 0.0107)
f) 3 heads and 7 tails (Ans.0.1172)
9. In a box containing 90 screws, 27 were defective what is the probability that out
of a sample of 6 screws
a. All defective (Ans.0.00073)
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b) No defective (Ans.0.1176)
c) At least one defective (Ans. 0.8824)
d) At most two defective (Ans. 07442)
e) Exactly 3 defective (Ans. 0.1852)
10. The latest nationwide political pool indicate that for Americans who are
randomly selected, the probability that they are conservative is 0.55, the prob.
that they are liberal is 0.30 and the probability that they are middle of the road is
0.15. Assuming that these probabilities are accurate, answer the following
questions. Pertaining to a randomly chosen group of 10 Americans.
a) What is the probability that four are liberal? Answer 0.2001
b) What is probability that none are conservative? Answer 0.0003
c) What is the probability that two are middle of the road? Answer 0.2759
d) What is the probability that at least eight are liberal? Answer 0.0016

11. The incidence of occupational disease in an industry is such that the workers
have a 20% chance of suffering from it, what is the probability that out of six
workmen, 4 or more will contact the disease. (Ans. 0.017)
12. The probability of a bomb hitting a target is 1/5. Two bombs are enough to
destroy a bridge. If six bombs are aimed at the bridge, find the probability that
the bridge is destroyed. Answer 0.345
13. If the mean of a binomial distribution is 6 and standard deviation is 2, find the
probability of at most 2 successes. Answer 0.99
14. If the likelihood of a tagged order form is 0.1,
a) What is the probability that three tagged order forms are found in the sample
of four orders? Answer 0.0036
b) What is the probability that three or more (i.e. at least three) tagged order
forms are selected out of the sample of four order forms? Answer 0.0037
c) What is the probability that there are fewer than three tagged order forms in
the sample of four orders that are selected? Answer 0.9963
15. If the mean of a binomial distribution is 0.4 and its standard deviation is 0.6, find
the probability of at least one success.
16. A commercial jet aircraft has four engines. For an aircraft in flight to land safely,
at least two engines should be in working condition. Each engine has an
independent reliability of 90%. What is the probability that an aircraft in flight
can land safely?
17. A multiple choice test has 5 questions. There are 4 choices for each question. A
student, who has not studied for the test, decides all the answer of all questions
randomly. What is the probability that he will get
a. Five questions correct?
b. At least four questions correct?
18. In a game called Taxation and Evasion, a player rolls a pair of dice. If one any
turn the sum is 7, 11, or 12, the player gets audited. Otherwise, she avoids taxes.
Suppose a player takes 5 turns at rolling the dice. What is the probability that she
gets audited at least once? Answer 0.7627
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19. Sixty percent of midsize manufacturers planned to have management

representatives visits Canada and Mexico to take advantages of opportunities
created by the North American Free Trade Agreement. An export import group
in Toronto, Canada has invited 6 Asian midsize manufactures to participate in a
conference to explore trade opportunities.
i. What is the probability that more than half of these manufactures will send
representatives?
ii. If export import group in Toronto has invited 150 such Asian midsize
manufacturers to participate in a conference, what is the probability that
more than half of these manufactures will send representatives.(Normal
distribution)
20. A certain type of new business succeeds 60% of the time. Suppose that 3 such
businesses open (where they do not compete with each other so it is reasonable
to believe that their relative successes would be independent). What is
probability that all 3 businesses fail? Answer 0.064
21. Suppose that past history shows that 60% of college students prefer brand C cola.
A sample of 5 students is to be selected.
a) What is the probability that less than 2 prefer brand C? Answer 0.0870
b) What is the probability that more than 3 prefer brand C? Answer 0.3370
22. A machine that produces stampings for automobile engines is malfunctioning
and producing 10% defectives. The defective and non-defective sampling
proceeds from the machine in random manner. If the next five stamping are
tested, find the probability that exactly three of them are defectives?

Poisson distribution

1. If the prices of new car increase an average of four times every 3 years, find the
probability of ( hint λ = 4)
a. No price hikes in a randomly selected period of 3 years. Answer 0.0183
b. Two price hikes. Answer 0.1464
c. Four price hikes. Answer 0.1952
d. Five or more hikes. Answer 0.3717
2. The quality control manager of Marilyn’s cookies is inspecting a batch of chocolate
chip cookies that have just been baked. If the production process is in control, the
average number of chip parts per cookies is 6.0. What is the probability that in any
particular cookies being inspected
a. At most three chip parts will be found?
b. None of the chip parts will be found?
c. Exactly five chip parts will be found? Answer 0.1606
d. Five or more chip parts will be found? Answer 0.7149
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e. Four or five chip parts will be found? Answer 0.2945

3. The average number of claims per hour made to the Gnecco and Trust Insurance
Company for damages or losses incurred in moving is 3.1. What is the probability
that in any given hour
a. Fewer than three claims will be made?
b. Exactly three claims will be made?
c. Three or more claims will be made?
d. More than three claims will be made?
4. If on average, three customers arrive per minute at the bank during the lunch hour,
what is the probability that more than two customers will arrive in a given minute?
e- 3 = 0.049787

5. Airline passengers arrive randomly and independently at the passenger screening

facility at a major international airport. The average arrival rate is 6 passengers per
minute.
a. What is probability that more than three passengers will arrive in a minute?
b. What is the probability that three or four passengers arrive in a minute?
c. What is the probability that exactly one passenger arrive in a minute?
d. What is the probability that at least two passengers arrive in a minute?
e. What is the probability that exactly one passenger will arrive in two minutes?
f. What is the probability that at least two passengers arrive in two minutes?
6. Vehicles arrive an intersection at the rate of 10 per minute. A traffic light cycle lasts
45 seconds. If the number of vehicles that arrive per cycle follows a Poisson
distribution, what is the probability that exactly 6 vehicles will arrive in a cycle?
7. On the average, 4 customers per minute at any one of the checkout counters of a
grocery store. What is the probability that in the next one minute there will be
a) No customers arriving at a checkout counter?
b) At most two customers arriving at checkout counter?
8. The number of 911 calls (the telephone number used in the US to call the police, fire
or ambulance service in an emergency) in Butte, Montana, has a Poisson distribution
with a mean of 10 calls a day. What is the probability of 2 or more 911 calls in a day?
Answer 0.9995
9. The number of power outages at a nuclear power plant has a Poisson distribution
with a mean of 6 outages per year. What is the probability that there will be at least 3
power outages in a year? Answer 0.9380
10. The Department of Commerce in a particular state has determined that the number
of small businesses that declare bankruptcy per month is approximately a Poisson
distribution with a mean of 6.4.Find the probability that more than 3 bankruptcies
occur next month. Answer 0.881
11. The local police department must write, on average, 5 tickets a day to keep
department revenues at budgeted levels. Suppose the number of tickets written per
day follows a Poisson distribution with a mean of 6.4 tickets per day. Find the
probability that less than 6 tickets are written on a randomly selected day from this
population. Answer 0.384
12. The standard deviation of Poisson distribution is 1.5. Find the probability that
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a. X = 0
b. X = 3
c. X ≥ 1
d. 1 < X < 3.
Answer a) 0.1054 b) 0.20 c) 0.8946 d) 0.267

13. A hospital switch board receives an average of 3 emergency calls per minute. What
is the probability of receiving no calls in a one minute interval? Answer 0.0498
14. A small life insurance company has determined that on the average it receives five
death claims per day. What is the probability that the company will receive three
claims or less on a particular day?
Poisson approximation on Binomial distribution:

15. Given a binomial distribution with n = 30 trails and p = 0.04, use the Poisson
approximation to the binomial to find
a. P(r = 25) b. P (r= 3) c. P(r = 5)

16. The Orange county Dispute settlement center handles various kinds of disputes but
most are marital disputes. In fact 96 percent of the disputes handled by the DSC are
of a marital nature.
a) What is the probability that, out of 80 disputes handled by the DSC, exactly
seven are non-marital?
b) None are non marital?

17. Nepal Rastra bank is responsible for printing the country’s paper money. It has an
impressively small printing error only 0.5 percent of all bills are too flawed for
circulation. What is the probability that out of a batch of 1000 bills,
a. None are too flawed for circulation.
b. Ten are too flawed for circulation.
c. Fifteen are too flawed for circulation.
18. Find the probability that at most 5 defective fuse will be found in a box of 200 fuses,
if experience shows that 2% of such fuses are defective.(e-4 =0.0183),Answer 0.785
19. On the average one on 400 items is defective. If items are packed in boxes of 100,
what is the probability that any given box of items will contain
a. No defectives
b. Less than two defectives
c. One or more defectives
d. More than or equal to three defectives.
Answer a) 0.7788 b) 0.9735 c) 0.2212 d) 0.0022

20. A manufacture of pins knows that on an average 2% in production is defective. He

sells pins in boxes of 100 and guarantee that not more than two pins will be
defective. What is the probability that a box randomly selected (a) will meet the
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guaranteed quality (b) will not meet the guaranteed quality e -1 =0.3679, e-2 =0.1353.
Answer a) 0.6765 b) 0.3335

Normal distribution
It is continuous probability distribution which is symmetrical abut mean. Its probability

density function is. . Where curve of normal

distribution is bell shaped as below.

-∞X=µ ∞

Normal distribution: Properties or

Characteristics
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1. The normal distribution is bell shaped with the most frequent observations at the
mid point.
2. The normal distribution is a symmetrical distribution so that left half of the curve is
a mirror image of the right half.
3. The mean, median and mode coincide.
4. This is a continuous probability distribution, so that theoretically, the number of
values the variable can assume on the x- axis is infinite.
5. The total area under the curve is equal to 1.
6. Mean of normal distribution is µ and variance of normal distribution is σ 2

7. µ and σ are parameter of normal distribution.

8. Point of inflexion occurs at

9.Area under normal probability curve for various values of µ and σ is as follows

Limits Area %
68.26
95.44
99.73

68.26%

95.9

9.73%
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Standard normal distribution:

Normal distribution is convert in to standard normal distribution by using following
transformation

Where Z is Standard normal variable ,x is normal random variable with mean µ and
standard deviation sigma. Where mean of standard normal distribution is 0 and
variance is 1.All values of standard normal variate are tabulated in the standard normal
table.

-∞ ∞

P(Z<0)=0.5 z=0 P(Z>0)=0.5

The Normal distribution as an approximation of Binomial distribution

The Normal distribution is used to approximate Binomial distribution under the

following conditions.

 The number of trails (n) is indefinitely large (i.e. n →∞ )

 Neither p nor q is very small.
In general, we use Normal distribution to approximate Binomial distribution whenever
both np and nq are at least 5

np≥5 Conditions
nq≥5 for using
Normal
distribution

Example:What is probability of getting 5 to 8 heads in 10 tosses of a fair coin?

1
Solution: Given that, p= 2 =0.5 and n=10

Let us solve the problem by using Binomial distribution method.

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We have, P(X=5, 6,7 or 8)= P(5)+ P(6)+ P(7)+ P(8)

10C p5 q 10−5 + 10C p 6 q 10−6 + 10C p 7 q 10−7 + 10C p 8 q 10−8

= 5 6 7 8

= 0.2461+ 0.2051+ 0.1172+ 0.0439

=0.6123.

The above process is very tedious and time consuming. We can easily solve this
problem by Normal distribution method. The Normal approximation will be calculated
with the mean and standard deviation of Binomial distribution.

That is , Mean, μ =np= 10 ¿ 0.5=5 And, σ=√ npq =1.581

Now we are required to find, P ( 5≤ X≤8 ) =? (Where X= number of heads)

Use of continuity correction factor: We need to use 0.5 as continuity factor so that both
values 5 and 8 could be included (In other words, to change binomial distribution into
continuous distribution, use o.5 as continuity factor).

P ( 5≤ X≤8 ) =P ( 4 . 5< X<8 .5 )

X−μ
Z=
Hence we have, σ

4 .5−5 8 . 5−5
Z= =−0. 32 Z= =2. 21
For X= 4.5, 1. 581 For X= 8.5, 1 .581

Now, P(−0. 32≤Z≤2 . 21) = 0.1255+0.4864 (From normal table) = 0.6119

(Note that when using Binomial distribution it was 0.6123, the answer was closer).

Note:Some scholars suggest that continuity correction factor may not be necessary (or
may be neglected), if the sample size is reasonably large. The problem becomes simpler
in such a case.

Class work and Home assessment

1. Given a standardized normal distribution (with a mean of 0 and a standard
deviation of 1) what is the probability that
a. Z is less than 1.5? Answer 0.9418
b. Z is greater than 1.84? Answer 0.0329
c. Z is between 1.57 and 1.84? Answer 0.0253
 21

d. Z is less than 1.57 or greater than 1.84? Answer0.9747

e. Z is between -1.57 and 1.84? Answer0.9089
f. Z is less than -1.57 or greater than 1.84? Answer0.0911
2. Given a normal distribution with µ = 100 and  = 10, what is the probability that
a. X > 75 answer 0.9938
b. X <70 answer 0.00135
c. 75 < X <85 answer 0.0606
d. X < 80 or X > 110. Answer 0.1815
e. 10% of the values are less than what Value? Answer 87.20
f. 80% of the values are between what two values of X (symmetrically
distributed around the mean) answer 87.20 and 112.80
g. 70% of the values will be above what value of X? Answer 94.8
3. Toby’s Trucking Company determined that on an annual basis, the distance
traveled per truck is normally distributed with a mean of 50 thousand miles and a
standard deviation of 12 thousand miles.
a. What proportion of trucks can be expected to travel between 34 and 50
thousand miles in the year?
b. What percentage of trucks can be expected to travel either below 30 or
above 60 thousand miles in the year?
c. How many of the 1000 trucks in the fleet are expected to travel between 30
and 60 thousand miles in the year?
d. How many miles will be traveled by at least 80% of the trucks?
4. The amount of time necessary for assembly line workers to complete a product is
a normal random variable with a mean of 15 minutes and a standard deviation of
2 minutes.
a. So, 17% of the product would be assembled within how many minutes?
Answer 13.1
b. So, 25% of the product would be assembled within how many minutes?
5. Given that X is a normally distributed random variable with a mean of 50 and a
standard deviation of 2. What is the probability that X is between 47 and 54?
Answer 0.9104

6. The owner of a fish market determined that the average weight for a catfish is 3.2
pounds with a standard deviation of 0.8 pounds. Assuming the weight of catfish
are normally distributed
a. What is the probability that a randomly selected catfish will weight between 3
and 5 pounds?
b. Above what weight (in pounds) do 89.80% of the weights occur?
c. What is the probability that a randomly selected catfish will weight more
than 4.4 pounds?
7. The number of column inches of classified advertisements appearing on Monday
in a certain daily newspaper is normally distributed with a population mean of
320 inches and a population standard deviation of 20 inches. What is the
 22

probability that there will be between 280 and 360 column inches of classified
advertisements? Answer 0.9545
8. If we know that the length of time it takes a college students to find a parking
spot in the library parking lot follows a normal distribution with a mean of 3.5
minutes and a standard deviation of 1 minutes,
a. Find the probability that a randomly selected college student will take
between 2 and 4.5 minutes to find a parking spot in the library parking lot.
Answer 0.7745
b. Find the point in the distribution that 75.8% of the college students exceed
when trying to find a parking spot in the library parking lot. Answer 2.8
minutes

9. The breaking strength of plastic bags used for packaging produce is normally
distributed with a mean of 5 pounds per square inch and a standard deviation of
1.5 pounds per inch. What proportion of the bags have a breaking strength of
a. Less than 3.17 pounds per square inch? Answer 0.1112
b. At least 3.6 pounds per square inch? Answer 0.8238
c. Between 5 and 5.5 pounds per square inch? Answer 0.1293
d. Between what two values symmetrically distributed around the mean will
95% of the breaking strengths fall? Answer 2.06 and 7.94

10. A set of final examination grades in an introductory statistics course was found to
be distributed as N (73, 8).
a. What is the percentage of students scored between 65 and 89?
b. What is the probability of getting a grade no higher than 91 on this exam?
c. Only 5% of the students taking the test scored higher that what grade?
d. What percentage of students scored between 65 and 89?

11. A statistical analysis of 1,000 long distance telephone calls made from the
headquarters of the Bricks and Clicks Computer Corporation indicates that the
length of these calls is normally distributed with µ = 240 seconds and  = 40
seconds.
a) What percentage of these calls lasted less than 180 seconds? Answer 0.0668
b) What is the probability that a particular call lasted between 180 and 300
seconds? Answer 0.8664
c) How many calls lasted less than 180 seconds or more than 30 seconds?
Answer 133.6
d) What is the length of a particular call if only 1% of all calls are shorter?
Answer 146.80 seconds
12. Unisys.com is one of the most frequented business to business Web sites, assume
that the length of a visit on the Unisys Web sites is distributed as a normal
 23

random variable with a mean of 65.7 minutes and a standard deviation of 15

minutes.
a. What is the probability that a randomly selected visit will last more than 90
minutes?
b. Only 20% of the visits will last less than how many minutes?
c. Between what two values (in minutes) symmetrically distributed around
the population will 90% of the visits last?
13. A set of final examination grades in an introductory statistics course was found to
be normally distributed with a mean of 73 and a standard deviation of 8.

a. What is the percentage of students scored between 65 and 89?

b. What is the probability of getting a grade no higher than 91 on this exam?
c. Only 5% of the students taking the test scored higher than what grade
14. .A building contractor claims that the mean and standard deviation of time taken
to renovate a 200-square foot kitchen and dining room are 40 hours and 5 hours
respectively. The work includes plumbing, electrical installation, cabinets,
flooring, painting and the installation of new appliances. Assuming, from past
experience, that the times to complete similar projects are normally distributed
with mean and standard deviation as estimated above,
a. What is the probability that the project will be completed in less than 35
hours?
b. What proportion of project will be completed in between 28 hours and 32
hours?
c. 10% of such projects require more than how many hours?
15. Supposeyou select a random sample of n= 1600 tires from an ongoing process in
which 8% of all such tires
produced are defective.
a. What is the probability that 150 or fewer tires will be defective? (Answer=
0.9808)
b. What is the probability exactly 150 tire will be defective? (Answer= 0.0047)
[Hint: To include 150, continuity correction factor is 0.5 is required on both
sides or find P(149.5 ¿ X≤150. 5) : Also note that Continuity correction may
be neglected if the sample size is reasonably large ]

16. For n= 100 and p= 0.20, use the normal distribution to approximate the
probability that
a. X=25
b. X>25
c. X ¿ 25
17. For overseas flights, an airline has three different choices on its dessert menu-
ice-cream, apple pipe, and chocolate cake. Based on passed experience, the airline feels
that each dessert is equally chosen. If a random sample of 90 passengers is selected,
what is the probability that:
 24

a. At least 20 will choose ice cream for dessert?

b. Exactly 20 will choose ice cream for dessert?
c. Less than 20 will choose ice cream for dessert?
18. Based upon past experience, 40% of all customers at a certain service station pay
for their
purchases with a credit card. If a random sample of 200 customers is selected, what is
the approximate probability that:
a. At least 75 pay with a credit card?
b. Not more than 70 pay with a credit card?
c. Between 70 and 75 customers, inclusive, pay with a credit card?
19. The New York time reported that the mean time to download the home page
for the internal Revenue service, is 0.8 seconds with standard deviation 0.2 second.
What is probability that the download time is
a. less than one second?
b. Between 0.5 and 1.5 second
c. above 0.5 second
d. 99% of the download times are above how many seconds?

20. A survey conducted in 2009 found that about forty percent of the employed
students graduated from the School of Business, Pokhara University wanted to
change their jobs once the economy improves. Assuming that this trend holds
good for the entire workforce of management graduates of this school.
i) Suppose that different organizations of Nepal randomly recruited 12 new
employees from this school, what is the probability that more than half of the
new recruits will switch their job.
ii) Suppose that different organizations of Nepal randomly recruited 150 new
employees from this school, what is the probability that more than half of the
new recruits will switch their job.
21 BijayaBanstola is the supervisor for the kaligandagiHydroelectricdam.Mr. Bijaya
knows that Dam's turbines generate electricity at the peak rate only when at least
1,000,000 gallons of water pass through the Dam each day. He also knows that
daily flow is normally distributed ,with mean equals to the previous days flow
and standard deviation of 200,000 gallons. Yesterday 850,000 gallons flowed
through the dam. What is probability that the turbines will generate at pick rate
today?
22 JarridMedical,Inc., is the developing a compact kidney dialysis machine, But its
chief engineer, Suraj, is having trouble controlling the variability of the rate at
which fluid moves through the device. Medical standards require that the hourly
flow be 4 liters, plus minus 0.1 liter, 80% of the time.Mr. Suraj, in testing the
prototype that 68% of the time, the hourly flow is with in 0.08 liter of 4.02
liter.Does the prototype satisfy the medical standard?
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