Lecture-13

The Mean, Variance, and Standard Deviation of a Probability

Distribution

In Chapter 3, we computed the mean and variance of a frequency

distribution. The mean is a measure of location and the variance is a
measure of the spread of the data. In a similar fashion the mean () and the
variance (2) summarize a probability distribution.

The Mean

The mean , or expected value E(x), is used to represent the central

location of a probability distribution. It is also the long-run average value of
the random variable. It is computed by the following formula:

Mean of a Probability Distribution

This formula directs you to multiply each outcome (x) by its probability
P(x); and then add the products.

Variance and Standard Deviation

While the mean is a typical value used to summarize a discrete probability

distribution, it does not tell us anything about the spread in the distribution.
The variance tells us about the spread or variation in the data. The variance
is computed using the following formula:
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Variance of a Probability Distribution

The steps in computing the variance using formula [6-2] are:

1. Subtract the mean () from each outcome and square these
differences.
2. Multiply each squared difference by its probability
3. Sum these products to arrive at the variance.

The standard deviation () of a discrete probability distribution is found by

calculating the positive square root of  2 , thus

Binomial Probability Distribution

Examples

 The answer to a True/False question (using guess work only)

 Classifying a product in to acceptable or not acceptable by quality
control department
 Rolling of a pair of dice and observing the two 6’s
 Tossing 6 coins and observing the three Heads
 Selecting a college graduate at random and classifying it either
employed or unemployed

One of the most widely used discrete probability distributions is the

binomial probability distribution. It has the following characteristics:
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1. An outcome of an experiment is classified into one of two mutually
exclusive categories: a success or a failure.
2. The random variable is the number of successes in a fixed number of
trials.
3. The probability of a success stays the same for each trial. So does the
probability of a failure.
4. The trials are independent, meaning that the outcome of one trial does
not affect the outcome of any other trial.

Illustrations of each characteristic are:

1. Each outcome is classified into one of two mutually exclusive

categories.

 An outcome is classified as either a "success" or a "failure."

 For example, 40 percent of the students at a particular university
are enrolled in the College of Business.
 For a selected student there are only two possible outcomes the
student is enrolled in the College of Business (designated a
success) or he/she is not enrolled in the College of Business
(designated a failure).

2. The binomial distribution is the result of counting the number of

successes in a fixed sample size.

 If we select 5 students, 0, 1, 2, 3, 4, or 5 could be enrolled in the

College of Business.
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 This rules out the possibility of 3.45 of the students being
enrolled in the College of Business.
 That is, there cannot be fractional counts.

3. The probability of a success remains the same from trial to trial.

 In the example regarding the College of Business, the

probability of a success remains at 40 percent for all five
students selected.

4. Each sampled item is independent.

 This means that if the first student selected is enrolled in the

College of Business
 It has no effect on whether the second or the fourth one selected
will be in the College of Business.

How a Binomial Probability Distribution is Computed

To construct a binomial probability distribution we need to know:

(1) The number of trials, designated n.

(2) The probability of success () on each trial.

The binomial probability distribution is constructed using the formula

[6-3]:
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Binomial Probability Distribution

Where:

denotes a combination of n items selected x at a time

n is the number of trials
x is the random variable defined as the number of observed successes
 is the probability of success on each trial (Do not confuse it with the
mathematical constant 3.416.)
The mean () and variance (2) of a binomial distribution can be computed
by these formulas.

Mean of a binomial distribution

Variance of a binomial distribution

We can verify the values of mean and variance using the formulas of mean
and variance for probability distributions we studied earlier
Mean of a Probability Distribution

Variance of a Probability Distribution

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Cumulative Binomial Probability Distribution

Likewise the cumulative frequency distribution and cumulative probability
distribution we did earlier, we can also create a cumulative Binomial
probability distribution.

This distribution is extremely helpful in finding the probabilities in which

the event is taking multiple values. E.g. we may be interested in knowing
the probability of correctly guessing the answers to 6 or more true/false
questions out of 10.

Example
In 5 random trials of tossing of a coin, what is the probability of getting at
least 2 heads? At most 3 heads?

Example

The quality inspection team at the Deviance Corporation has the task to
visit its 20 production units randomly. The probability of arriving at a
manufacturing unit on time (which is 11am) for the inspection team is 0.6.
What is the probability that in next 5 visits, team will arrive on time at 3
units?

Solution

n=5 x=3 π = 0.6

P(X=3) = 5C3 (0.6)3 (1 – 0.6)(5 – 3) = 0.3456

And the complete Binomial probability distribution is

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𝒙 𝑷(𝒙) = 𝒏𝑪𝒙(𝝅)𝒙 (𝟏 − 𝝅)𝒏−𝒙 𝒙. 𝑷(𝒙) (𝒙 − 𝝁)𝟐 . 𝑷(𝒙)

0 5C0 (0.6)0 (1 – 0.6)(5 – 0) = 0.0102 0.0000 0.09216

1 0.0768 0.0768 0.3072
2 0.2304 0.4608 0.2304
3 0.3456 1.0368 0.0000
4 0.2592 1.0368 0.2592
5 0.0778 0.3888 0.31104
∑ 1.0000 3.0000 1.2000

𝜇 = ∑ 𝑥. 𝑃(𝑥 ) = 3.000

𝜎 2 = ∑(𝑥 − 𝜇 )2 . 𝑃(𝑥) = 1.200

Points Regarding Binomial Probability Distribution

For any binomial probability distribution

 If n remains the same but we increase π (prob. of success) from 0.05

to 0.50, the shape of the distribution will change from positively
skewed to symmetric distribution.
 If n remains the same but we increase π (prob. of success) from 0.50
to 0.95, the shape of the distribution from symmetric to positively
skewed distribution.
 If π (prob. of success) remains the same but n is increased to large
numbers, the shape of the binomial distribution starts becoming
symmetrical