MSIS 3223 Exam 2 Questions with Verified
Correct Answers
Classical Definition of Probability
probabilities can be deduced from theoretical arguments
Relative frequency
probabilities are based on empirical data (information gathered through
observation/experiement). the probability that an outcome will occur is simply the relative
frequency assocaited witht that outcome
Subjective probability
probabilities are based on judgment and experience
3 perspectives/types of probability
Classical
Relative Frequency
Subjective
Probabilities are expressed as values between_______.
0 and 1
Classical definition of probability example
Suppose two consumers try a new product.
Four outcomes:
1. like, like
2. like, dislike
3. dislike, like
, 4. dislike, dislike
Probability at least one dislikes product = 3/4
Subjective probability example
at the beginning of the season, sports expterts might predict what the probability of a specific
team winning the national championship.
this is based off of judgement and experience.
random variable
a numerical description of the outcome of an experiment
random variables may be _____ or _____.
continuous or discrete
discrete random variable
is one for which the number of possible outcomes can be counted
Examples:
- outcomes of dice rolls
- whether a customer likes or dislikes a product
- number of hits on a Web site link today
continuous random variable
has outcomes over one or more continuous intervals of real numbers
Examples:
- weekly change in DJIA
Correct Answers
Classical Definition of Probability
probabilities can be deduced from theoretical arguments
Relative frequency
probabilities are based on empirical data (information gathered through
observation/experiement). the probability that an outcome will occur is simply the relative
frequency assocaited witht that outcome
Subjective probability
probabilities are based on judgment and experience
3 perspectives/types of probability
Classical
Relative Frequency
Subjective
Probabilities are expressed as values between_______.
0 and 1
Classical definition of probability example
Suppose two consumers try a new product.
Four outcomes:
1. like, like
2. like, dislike
3. dislike, like
, 4. dislike, dislike
Probability at least one dislikes product = 3/4
Subjective probability example
at the beginning of the season, sports expterts might predict what the probability of a specific
team winning the national championship.
this is based off of judgement and experience.
random variable
a numerical description of the outcome of an experiment
random variables may be _____ or _____.
continuous or discrete
discrete random variable
is one for which the number of possible outcomes can be counted
Examples:
- outcomes of dice rolls
- whether a customer likes or dislikes a product
- number of hits on a Web site link today
continuous random variable
has outcomes over one or more continuous intervals of real numbers
Examples:
- weekly change in DJIA
