BUSAN 220: Intro to Business Statistics

Chapter 6:
Continuous Probability Distributions
(Part 2)

Hyeonsik Shin
[email protected]
Remaining Schedule
 Table of Content
6.1 Continuous Random Variables and the
Uniform Distribution
Review of Quiz 5 and Homework 5
6.2 The Normal Distribution
6.3 Other Continuous Probability Distributions
Review of Quiz 5 and Homework 5
 Overview of Chapters 5 and 6

Outcomes Probability
Experiment
(Random Variable) Distribution

1
𝑃 ( 𝑋 =𝑥 ) =
6
Discrete Distribution
(Ch 5)

𝑃 ( 8 ≤ 𝑋 ≤ 10 )
Continuous
How long do you sleep per day?
Distribution (Ch 6)
6.2 The Normal Distribution
 Natural Phenomena

Height Weight IQ Test Score

• How do their distributions look like?

• More frequent values close to the mean
• Less frequent values far from the mean

Symmetric, bell-shape distribution!

 Normal Distribution
• A symmetric and bell-shaped distribution
– This means most of the observations are clustered
at the center (average)!

X
Average (µ)
 Normal Distribution is Very Common
• Can be applied to a wide range of random
variables

Height SAT Score

Weight of a Newborn Baby

 Large Data Usually Follows
the Normal Distribution
• In many cases, you will get the normal
distribution!
Height
SAT Score

Weight
The Amount of
Online Purchases

Annual Salary
Normal Distribution
.
.
.
 Characteristics of the
Normal Distribution
1. Bell-shaped and symmetric around its mean
2. Described by two parameters
– The mean and the variance
3. Asymptotic: tails get closer and closer to the
horizontal axis but never touch it

0.5 0.5
The area under
the curve equals 1
 Characteristics of the
Normal Distribution
1. Bell-shaped and symmetric around its mean
2. Described by two parameters
– The mean and the variance
3. Asymptotic: tails get closer and closer to the
horizontal axis but never touch it

The center represents

the mean (average)!

Score
𝜇=60 𝜇=80
 Characteristics of the
Normal Distribution
1. Bell-shaped and symmetric around its mean
2. Described by two parameters
– The mean and the variance
3. Asymptotic: tails get closer and closer to the
horizontal axis but never touch it
=6
If the variance (standard deviation) is
larger, the distribution becomes flatter.
= 10

X
𝜇=60
 Characteristics of the
Normal Distribution
1. Bell-shaped and symmetric around its mean
2. Described by two parameters
– The mean and the variance
3. Asymptotic: tails get closer and closer to the
horizontal axis but never touch it
 Calculating the Probability of a Normally
Distributed Random Variable
• What is the probability that a student scores between 70
and 90 on an exam? Assume a normal distribution of
and .
What percentage
does the colored
area have?

70 𝜇=80 90

• Probability is the area under the curve within the interval

• Curve makes calculation very challenging!
 Steps to Calculate Probabilities

1.

2. & 3.
1. Convert a normal distribution into a standard normal
distribution (Standardization)
2. Find z-scores in your interval
3. Calculate the probability using a z-score table or Excel
 Standard Normal Distribution
• A special case of the normal distribution,
denoted by Z
– The mean is 0
– The standard deviation is 1
– The numbers on the x-axis are z-scores
 Standard Normal Distribution
• The Empirical Rule (Ch. 3) is from the Standard
Normal Distribution
 Calculating the Probability of a Normally
Distributed Random Variable
• How can we calculate ?
• We calculate the area under the graph of the
standard normal distribution,

What percentage does the

colored area have?

Z
𝑎 𝜇=0𝑏
 Steps to Calculate the Probability of a
Normal Random Variable
1. Transform a normal distribution to a standard
normal distribution (Standardization)
2. Find z-scores in your interval
3. Calculate the probability using either
– The z-score table or
– Excel function =NORM.S.DIST(z,TRUE)
 Exercise
• Scores on a statistics exam are normally distributed with a
mean of 80 and a standard deviation of 10. What is the
probability that a randomly selected student will score
between 70 and 90?
What we already know:
What percentage • : Continuous random variable of
does the colored
area have?
an exam score

1. Standardization (Convert X into Z)

X
70 𝜇=80 90  We can use to convert any number of X
into a z-score on the Standard Normal
? Distribution!
 Exercise
• Scores on a statistics exam are normally distributed with a
mean of 80 and a standard deviation of 10. What is the
probability that a randomly selected student will score
between 70 and 90?
1. Standardization (Convert X into Z)
What percentage
does the colored
area have?

2. Find z-scores in your interval

X
70 𝜇=80 90
? becomes ?
Z
−1𝜇=01
 Exercise
• Scores on a statistics exam are normally distributed with a
mean of 80 and a standard deviation of 10. What is the
probability that a randomly selected student will score
between 70 and 90?

3. Calculate the probability

• Method 1: Using a z-score table

?
 Z-Score Table
• Shows a cumulative probability of z in the
standard normal distribution

Can you find ?

Or ?
https://www.z-table.com/
 Exercise
• Scores on a statistics exam are normally distributed with a
mean of 80 and a standard deviation of 10. What is the
probability that a randomly selected student will score
between 70 and 90?

3. Calculate the probability

• Method 1: Using a z-score table

Z
¿ 0.8413 − 0.1587
¿ 0.6826
?
 Exercise
• Scores on a statistics exam are normally distributed with a
mean of 80 and a standard deviation of 10. What is the
probability that a randomly selected student will score
between 70 and 90?

3. Calculate the probability

• Method 2: Using Excel to calculate

cumulative probabilities

=NORM.S.DIST(z,TRUE) gives you a

cumulative probability just like the z-
score table
?
 Exercise
• Scores on a statistics exam are normally distributed with a
mean of 80 and a standard deviation of 10. What is the
probability that a randomly selected student will score
between 70 and 90?

3. Calculate the probability

• Method 2: Using Excel to calculate

cumulative probabilities

=NORM.S.DIST(1,TRUE)
? =NORM.S.DIST(-1,TRUE)

¿ 0.8413 − 0.1587
¿ 0.6826
 Summary
• Normal Distribution
• Large Data Usually Follows the Normal
Distribution
• Characteristics of the Normal Distribution
• Calculating the Probability of a Normally
Distributed Random Variable
– Standard Normal Distribution
 Next Step
• Student Hours
– Mondays & Wednesdays
– Location: 470D in Wood Hall
– 12:20pm-1:20pm
– 3:35pm-4:35pm

• Quiz 6 and Homework 6

– Due Monday (Nov 18)