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Business Statistics Vocabulary
Test 2
38
Other
Undergraduate 2
02/11/2009

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Term
Probability
Definition
the chance that an event will occur
Term
Types of Probability
Definition

A Priori/ Emperical 

Eperiamental

Baysian

Term
Priori Probability
Definition
  • based on prior knowledge of the process involved
  • based on formulas that you can use before an event occurs
Term
Baysian Probability
Definition
based upon prior information (hunches)
Term
Simple Events (Marginal Events)
Definition
events than can be described by one characteristic (mutually exclusive)
Term
Sample Space
Definition

Collection of all possible events

(collectively exhaustive)

Term
Random Experiment
Definition
a process that results in the selection of only one of many possible outcomes with uncertaintly as to which outcome will occur
Term

First Axion of Probability

Definition
0<_ P (Ei)<_ 1.0
Term
Second Axion of Probability
Definition
P(Ei or Ei) = P(Ei) + P(Ei)
Term
Third Axion of Probability
Definition

                             N

Σ P(Ei)=1

                            i=1

Term

Joint Event

Definition
an event that requires two or more characterisitcs to describe
Term
Intersection
Definition
the intersection of two events (A & B) is where both event A & event B occur
Term
Union
Definition
the union of tow events A & B is where either A occurs, B occurs, or both occur
Term

If two events are on the same axis they are

Definition
simple events
Term

If two events are not on the same axis, they are

Definition
joint events
Term

If two events are statistically independent, having knowledge about "B"....

Definition

doesn't give you information about "A"

Term
If two events are statistically dependent, having knowledge about "B"
Definition
does provide information about "A"
Term
Two events are statistically independent if and only if: (Equation)
Definition
P(A/B) =P(A)
Term

Statistically independent (equation)

Definition
P (A ∩ B) = P (A and B) = P(A)P(B)

 

Term

Statistically Dependent

(Equation)

Definition
P(A ∩ B) = P(A and B) = P(A¦B)P(B)
Term
How to Prove Statistical Independence
Definition

1. Find P(A¦B)

2. Find P(A)

3. if 1=2 A&B are statistically independent

or

if 1≠2 A&B are statistically dependent

Term
If you sample with replacement, all events are statistically....
Definition
INDEPENDENT!!!!
Term
The urn never changes when sampling....
Definition
with replacement
Term
If you sample without replacement, all events are statistically
Definition
dependent
Term

Contingency Tables

(marginal and intersection)

Definition

- marginal on the outside

-intersection on the inside

Term
Different ways to express joint events
Definition

A intersect B

A and B

A ∩ B

Term

Joint Events

(Equation)

Definition

P(A U B) = P(A or B)= P(A) + P(B) - P(A ∩ B)

Term

Simple Events

(Equation)

Definition
P(A U B) =P(A or B) = P(A) + P(B)
Term
Venn Diagram
Definition

the second way to present a sample space.

* Represents the various events as "unions" and "intersections" of circles

Term
Contingency Table
Definition

a way to present a sample space

* uses a table of cross-classifications to present a sample space

Term
Empirical Probability
Definition

* the outcomes are based on observed data

*NOT ON PRIOR KNOWLEDGE of a process

Term
Subjective Probability
Definition
*differs from person to person
Term
P(A¦B)=
Definition

P(A and B)

P(B)

Term
P(B¦A)=
Definition

P(A and B)

P(A)

 

 

P(A¦B)P(B)

P(A)

Term

Mutually Exlusive Events

Definition

if both events cannot occur simultaneously

 

(the result of a coin toss cannot simultaneously be a head and a tail)

Term
Cellectively Exhaustive Events
Definition

one of the events must occur

 

( if heads doesn't occu, tails must occur)

Term

Conditional Probability

Definition

the probability of event A, given information about the occurence of another event B

 

P(A¦B)= P(A and B)

          P(B)

Term

Three Axioms of Probability states:

Definition
Given N simple events that are collectively exhaustive (mutually exclusive)
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