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A 2 3 1 105 1.8 3 2
B 5 1 2 120 1.7 2 1.5
C 6 2 4 145 2.3 1 1
D 2 4 8 102 1.6 4 3
E 1 1 1 200 1.7 3 4
F 0 2 0 195 1.5 2.5 1
RANDOM VARIABLES
We use a capital letter, say X, to
denote a random variable and its POSSIBLE OUTCOMES VALUE OF THE
corresponding small letter, x in this (SAMPLE SPACE) RANDOM VARIABLE X
case, for one of its values. (NUMBER OF RED BALLS)
RR 2
Example 1: Two balls are drawn in
succession without replacement RB 1
from an urn containing 4 red balls BR 1
and 3 black balls. The possible
BB 0
outcomes and the values x of the
random variable X, where X is the
number of red balls are:
RANDOM VARIABLES
Example 2:
A coin is tossed twice. What are the possible outcomes and the
values x of the random variable X, where X is the number of head.
Example 3.
Three coins are tossed. What are the possible outcomes and the
values x of the random variable X, where X is the number of tails.
Discrete Probability Distributions
of Random Variables
A discrete probability distribution consists of the values
a random variable can assume and the corresponding
probabilities of the values.
Step 1:
Determine the sample space. Let H represent head and T
represent tail.
Step 2:
Count the number of tails in
each outcome in the sample
space and assign this
number to this outcome.
Discrete Probability Distributions
of Random Variables
Step 3:
There are four possible values of the random variable Y
representing the number of tails. These are 0, 1, 2, and 3.
Assign probability values P(Y) to each value of the random
variable.
Discrete Probability Distributions
of Random Variables
Continuation Step 3
• There are 8 possible outcomes and no tail occurs once, so the probability that we
shall assign to the random variable 0 is 1/8 .
• There are 8 possible outcomes and 1 tail occurs three times, so the probability
that we shall assign to the random variable 1 is 3/8 .
• There are 8 possible outcomes and 2 tails occur three times, so the probability
that we shall assign to the random variable 2 is 3/8 .
• There are 8 possible outcomes and 3 tails occur once, so the probability that we
shall assign to the random variable 3 is 1/8 .
Discrete Probability Distributions
of Random Variables
Step 2:
Count the number of
defective cell phones in each
outcome in the sample space
and assign this number to
this outcome.
Discrete Probability Distributions
of Random Variables
Step 3:
There are four possible values of the random variable
X representing the number of defective cell phones.
These are 0, 1, 2, and 3. Assign probability values
P(X), to each value of the random variable.
Discrete Probability Distributions
of Random Variables
Continuation Step 3
• There are 8 possible outcomes and no defective cell phone occurs once, so the
probability that we shall assign to the random variable 0 is 1/8 .
• There are 8 possible outcomes and 1 defective cell phone occurs three times, so
the probability that we shall assign to the random variable 1 is 3/8 .
• There are 8 possible outcomes and 2 defective cell phones occur three times, so
the probability that we shall assign to the random variable 2 is 3/8 .
• There are 8 possible outcomes and 3 defective cell phones occur once, so the
probability that we shall assign to the random variable 3 is 1/8 .
Discrete Probability Distributions
of Random Variables
Probability Distribution
of Random Variable X
Discrete Probability Distributions
of Random Variables
Value of X 0 1 2 3
What is the probability that the
player successfully makes at Probability 0.064 0.288 0.432 0.216
4. Determine the value c so that the function P(x) = c(x2 + 4), for x = 0,
1, 2, 3, can serve as a probability distribution of the discrete
random variable X.
Learning Activity 2.3a
1. Telephones per Household. A study was conducted to determine the number
of telephones each household has. The data are shown here.
Number of telephones 0 1 2 3 4
Frequency 2 30 48 13 7
Construct a probability distribution table.
2. Fifteen words are written on small chips of paper and places in a bowl. There
are three words with three letters, two words with five letters, four words
with sic letters, two words with seven letters and one words with ten letters.
A chip is randomly selected from the bowl. Let X denote the number of
letters in the word written on the selected chip. Construct a probability
distribution table.
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Learning Activity 2.3a
3. An experiment consists of drawing a random sample of four LED lights from a
shipment which is known to contain 5% defective items. Let Y denote the
number of defective items found in the sample. Construct a probability
distribution table.
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Mean of a Discrete Random Variable
For a discrete random variable X with
the probability distribution shown here,
This formula shows variance, taking the square root would give us s:
Standard Deviation of a Discrete Random Variable
Example 1. A basketball player shoots three free throws. The random
variable X is the number of baskets successfully made.
µX = 1.8.
Value of X 0 1 2 3
Probability 0.064 0.288 0.432 0.216
The variance σ2 of X is
σ2 = 0.064*(0−1.8)2 + 0.288*(1−1.8)2 + 0.432*(2−1.8)2 + 0.216*(3−1.8)2
= 0.20736 + 0.18432 + 0.01728 + 0.31104
= 0.72 Take the square root to get SD: SD = 0.85
Standard Deviation of a Discrete Random Variable
Example 2. Linda is a sales associate at a large auto dealership. At her
commission rate of gross profit on each vehicle she sells, Linda expects
to earn Php 35,000 for each car sold and Php 40,000 for each truck or
SUV sold. Linda motivates herself by using probability estimates of her
sales. For a sunny Saturday in March, she estimates her car sales as
follows:
Cars Sold (X) 0 1 2 3
Let X be the amount a player can win or lose in one round of the game.
win lose
X 3-1 -1
P(x) 1/6 5/6
XP(x) 2/6 -5/6
The negative expected value (mean value) shows that the policy is designed to the
advantage of the insurance company but car owners still buy these insurance policies
because the security it provides in the even of the loss is worth the cost to them.
Applications:
Example 4. A company estimates that about 0.7% of their products will
fail after the 1-year warranty but within two years from the date of
purchase. If this happens, the company will pay a replacement cost
Php3,500. If the company offers its customers an extended warranty
covering a period of two years for the price of Php 480, what is the
company’s expected value for each extended warranty that it can sell?
Let X be the random variable represents the company’s net gains.
X 480-3,500 480
P(x) 0.007 0.993
This shows that on the average, the company stands to gain 455.50 pesos for each
extended warranty it sell. Whatever costs incurred from the replacement claims can be
offset by the revenue from the sales of the warranty.
Applications:
Example 4. Tony and Alex are planning to invest some of their savings
in bonds. They went to a bank to talk to their investment advisor and
they were given two investment options on bonds: (a) 6% interest but
with a 3% default rate; (b) 5% interest with a default rate of 2%. In
case of a bond default, all the money invested in bonds will be lost. They
plan to invest 200,000 pesos of their savings on bond. Find the
expected value in returns on two bonds. Based on the results which
bond should Tony and Alex invest in?
Let X be the returns on the first bond
Y be the returns on the second bond
• The proceed for the first bond is 200, 000x0.06=12,000
• The proceed for the second bond is 200,000x0.05=10,000
Applications:
Let X be the returns on the first bond
Y be the returns on the second bond
• The proceed for the first bond is 200, 000x0.06=12,000
• The proceed for the second bond is 200,000x0.05=10,000
X 12,000 -200,000
P(x) 0.97 0.03
Y 10,000 -200,000
P(y) 0.98 0.02
Y 10,000 -200,000
P(y) 0.98 0.02
Since the expected value of Y is higher than the expected value of X, it would be
better for Tony and Alex to invest money on the second bond.
Learning Activity 2.3b
1. If the probability distribution for a discrete random variable is given by the formula:
𝑐𝑥, 𝑖𝑓 𝑥 = 0, 1, 4
𝑃 𝑥 =
0, 𝑖𝑓 𝑥 = 3
Find the value of c.
2. A computer store received a delivery of 12 tablets from one of its suppliers. The
delivery contains 3 defective units and the store’s technician test the four of the
units.
a. Construct the probability distribution for the number of good units that are tested.
b. Construct the probability distribution for the number of defective units that are tested.
c. The entire delivery will be returned if at least two defective units are identified from the
units that are tested. Find the probability that the delivery will be returned.
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Learning Activity 2.3b
3. At a car wash, an attendant is paid according to the number of cars that are serviced
during his shift. If X is the amount of income the attendant receives over a two-
hour period, compute the employee’s expected earnings for two hours. The
probability distribution of X is shown below:
4. A woman can earn 50,000 pesos in one year with a probability of 0.35 or lose 15,000
over the same period with a probability of 0.65 by investing in the stocks of a
certain company. Compute her expected earnings from this investment.
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Learning Activity 2.3b
5. The program committee for the 25th anniversary celebration of a company is selling
1,000 tickets ate 250 pesos each. The sole winner will be chosen by an electronic
raffle and will win a cash prize of 100,000 pesos. Find the expected net gain of an
employee who buys:
a. one ticket
b. two tickets
c. three tickets
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