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Review of Probability Distributions
Discrete Probability
Distributions
Binomial Poisson
The Binomial probability distribution :
P (X = r) = (n / r ! (n-r) !) p r (1 – p ) n – r
for r = 0,1,2,…, n.
Where n ! = (n factorial) is n ! = n (n-1) (n-2) …(1);
0 ! = 1, by definition.
p may be known a priori or it may be estimated empirically
as p = r/n, the ratio of the number of successes observed in
the n trials to the number of trials.
Properties of the binomial distribution :
•Characterised by n and p.
•Mean = np
•Variance = np(1-p)
•Standard deviation = np (1-p)
The Poisson probability distribution :
P(X = r) = e- r / r ! for r = 0, 1, 2, …,
–0.5((x-)/)2
f (X=x) = 1/ ( 2) e
Where = 3.1416. The function depends only on
the mean and standard deviation because
they are the only components that vary.
Because the area under the curve is equal to 1, we can
use the curve for calculating probabilities. For example,
to find the probability that an observation falls between
a and b on the curve, we integrate the preceding equation
between a and b, where - is given the value a and +
is given the value b. (Integration is a mathematical technique
in calculus used to find area under a curve).