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Chapter 7

Random Variables and


Discrete Probability Distributions

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or in part.
Random Variables
 A random (stochastic or chance) variable is a function or rule
that assigns a numerical value to each outcome in the sample
space of a random experiment

 Nomenclature:
 Capital letters are used to represent
random variables (e.g., X, Y)
 Lower case letters are used to represent
specific values of the random variable (e.g., x, y)

 The random variable often is a direct result of an observational


experiment (eg., counting the no. of takeoffs in a given hour at an
airport)

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Random Variables
 Consider an experiment of flipping 2 balanced coins and observing
the results. We can represent the events as
Heads on the 1st coin and Heads on the 2nd coin
Heads on the 1st coin and Tails on the 2nd coin
Tails on the 1st coin and Heads on the 2nd coin
Tails on the 1st coin and Tails on the 2nd coin

However, we can list the events in a different way. Instead of defining


the events by describing the outcome of each coin, we can count
the number of heads (or, if we wish, the number of tails). Thus the
events are now
2 Heads; 1 Head; 1 Head; 0 Heads
So, the no. of heads is called a random variable X which takes the
value 0, 1 and 2
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Random Variables
 Consider another example of tossing two dice. One way of listing
events is to describe the number on the 1st die and the number on
the 2nd die as follows
{(1,1), (1,2), (1,3), (1,4), (1,5), (1,6),
(2,1), (2,2), (2,3), (2,4), (2,5), (2,6),
(3,1), (3,2), (3,3), (3,4), (3,5), (3,6),
(4,1), (4,2), (4,3), (4,4), (4,5), (4,6),
(5,1), (5,2), (5,3), (5,4), (5,5), (5,6),
(6,1), (6,2), (6,3), (6,4), (6,5),
(6,6)}

However, in almost all games, the player is interested in the total.


Accordingly, we can list the totals of the two dice instead of the
individual numbers
If we define the random variable X as the total of the two dice, then X
can equal 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12
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Two Types of Random Variables

 Discrete Random Variable: It can take on only a finite or


countably infinite number of distinct values such as 0,1,2….
For example, the number of letters received by a post office
during a particular time period, no. of machines breaking down
on a given day, no. of vehicles arriving at a toll bridge

 Continuous Random Variable: It can take any numerical value


in an interval. For example, amount of rainfall in a rainy season,
height of individuals

Analogy:
Integers are Discrete, while Real Numbers are Continuous
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Probability Distributions
A probability distribution is a table, formula, or graph that
describes the values of a random variable and the
probability associated with these values

Since we’re describing a random variable (which can be


discrete or continuous) we have two types of probability
distributions:
– Discrete Probability Distribution, (this chapter)
and
– Continuous Probability Distribution (Chapter 8)

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Probability Notation
An upper-case letter will represent the name of the random
variable, usually X

Its lower-case counterpart will represent the value of the


random variable

The probability that the random variable X will equal x is:


P(X = x)
or more simply
P(x)

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Discrete Probability Distributions
The probabilities of the values of a discrete random
variable may be derived by means of probability tools such
as tree diagrams or by applying one of the definitions of
probability, so long as these two conditions apply:

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Example 7.1
The Statistical Abstract of the United States is published
annually. It contains a wide variety of information based on
the census as well as other sources. The objective is to
provide information about a variety of different aspects of
the lives of the country’s residents. One of the questions
asks households to report the number of persons living in
the household. The following table summarizes the data.
Develop the probability distribution of the random variable
defined as the number of persons per household

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Example 7.1
Number of Persons Number of Households (millions)
1 31.1
2 38.6
3 18.8
4 16.2
5 7.2
6 2.7
7 or more 1.4
Total 116.0

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.1
Probability distributions can be estimated from relative
frequencies
It can be seen that all the
x P(x) requirements are satisfied.
1 31.1/116.0 = .268 Each probability lies
between 0 and 1 and the
2 38.6/116.0 = .333 total of all the
probabilities is 1
3 18.8/116.0 = .162
4 16.2/116.0 = .140
5 7.2/116.0 = .062
6 2.7/116.0 = .023
7 or more 1.4/116.0 = .012
Total 1.000
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Example 7.1
E.g. what is the probability there are 4 or more persons in
any given household?
x P(x)
1 .268
2 .333
3 .162
4 .140
5 .062
6 .023
7 or more .012

P(X ≥ 4) = P(4) + P(5) + P(6) + P (7 or more)


= .140 + .062 + .023 + .012 = .237

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.2
A mutual fund salesperson has arranged to call on three
people tomorrow. Based on past experience the salesperson
knows that there is a 20% chance of closing a sale on each
call. Determine the probability distribution of the number
of sales the salesperson will make

Let S denote success, i.e. closing a sale P(S)=.20


Thus SC is not closing a sale, and P(SC)=.80

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.2…
Developing a Probability Distribution…
Sales Call 1 Sales Call 2 Sales Call 3
(.2)(.2)(.8)= .032

P(S)=.2 SSS
P(S)=.2 X P(x)
P(SC)=.8 S S SC
P(S)=.2 S SC S 3 .23 = .008
P(S)=.2
P(SC)=.8 2 3(.032)=.096
P(SC)=.8 S S C SC 1 3(.128)=.384
P(S)=.2 SC S S
0 .83 = .512
P(SC)=.8 P(S)=.2
P(SC)=.8 SC S S C
P(S)=.2 SC SC S
P(SC)=.8
P(SC)=.8 SC SC SC
P(X=2) is illustrated here…
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Population/Probability Distribution
The discrete probability distribution represents a
population
Example 7.1 the population of number of TVs per household
Example 7.2 the population of sales call outcomes

Since we have populations, we can describe them by


computing various parameters

E.g. the population mean and population variance

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Population Mean (Expected Value)
The population mean is the weighted average of all of its
values. The weights are the probabilities

This parameter is also called the expected value of X and is


represented by E(X)

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Population Variance
The population variance is calculated similarly. It is the
weighted average of the squared deviations from the mean

As before, there is a “short-cut” formulation

The standard deviation is the same as before:

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Example 7.3
Find the mean, variance, and standard deviation for the population of
the number of persons per household… (from Example 7.1). Assume
that the category “7 or more” is actually 7.

E( X ) = 1 P(1) + 2 P( 2) + ... + 7 P(7)

= 1(.268) + 2(.333) + 3(.162) + 4(.140) + 5(.062) + 6(.023) + 7(.012)


= 2.513

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.3
Find the mean, variance, and standard deviation for the population
of the number of persons per household… (from Example 7.1)

= (1 – 2.513)2(.268) + (2 – 2.513)2(.333)+…+(7 – 2.513)2(.012)


= 1.958

The standard deviation is

σ = 1.958 = 1.399

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Laws of Expected Value
E(c) = c
The expected value of a constant (c) is just the value of the
constant

E(X + c) = E(X) + c
E(cX) = cE(X)
We can “pull” a constant out of the expected value expression
(either as part of a sum with a random variable X or as a
coefficient of random variable X)

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Laws of Variance
V(c) = 0
The variance of a constant (c) is zero

V(X + c) = V(X)
The variance of a random variable and a constant is just the
variance of the random variable (per 1 above)

V(cX) = c2V(X)
The variance of a random variable and a constant coefficient is
the coefficient squared times the variance of the random variable

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Binomial Distribution
The binomial distribution is the probability distribution
that results from doing a “binomial experiment”. Binomial
experiments have the following properties:

Fixed number of trials, represented as n


Each trial has two possible outcomes, a “success” and a
“failure”
P(success) = p (and thus: P(failure)=1– p), for all trials

The trials are independent, which means that the outcome


of one trial does not affect the outcomes of any other trials
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Success and Failure
…are just labels for a binomial experiment, there is no
value judgment implied

For example a coin flip will result in either heads or tails. If


we define “heads” as success then necessarily “tails” is
considered a failure (in as much as we attempting to have
the coin lands heads up)

Other binomial experiment notions:


An election candidate wins or loses
An employee is male or female

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Binomial Random Variable
The random variable of a binomial experiment is defined as the
number of successes in the n trials, and is called the binomial
random variable

E.g. flip a fair coin 10 times…

1) Fixed number of trials  n=10


2) Each trial has two possible outcomes  {heads (success), tails (failure)}
3) P(success)= 0.50; P(failure)=1–0.50 = 0.50 
4) The trials are independent  (i.e. the outcome of heads on the first flip will
have no impact on subsequent coin flips).

Hence flipping a coin ten times is a binomial experiment since all


conditions were met
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Binomial Random Variable
The binomial random variable counts the number of
successes in n trials of the binomial experiment. It can take
on values from 0, 1, 2, …, n. Thus, its a discrete random
variable

To calculate the probability of x successes in n trials of a


binomial experiment we use combinatorial formula:
n−x
P ( x) = Cx p (1 − P ) n x

i.e. for x = 0, 1, 2, …, n

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.9 – Pat Statsdud
Pat Statsdud is a (not good) student taking a statistics
course. Pat’s exam strategy is to rely on luck for the next
quiz. The quiz consists of 10 multiple-choice questions.
Each question has five possible answers, only one of
which is correct. Pat plans to guess the answer to each
question

What is the probability that Pat gets no answers correct?

What is the probability that Pat gets two answers correct?

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.9 – Pat Statsdud
Pat Statsdud is a (not good) student taking a statistics course
whose exam strategy is to rely on luck for the next quiz. The
quiz consists of 10 multiple-choice questions. Each question
has five possible answers, only one of which is correct. Pat
plans to guess the answer to each question

Algebraically then: n=10, and P(success) = 1/5 = .20

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.9 – Pat Statsdud
Is this a binomial experiment? Check the conditions:
 There is a fixed finite number of trials (n=10)
 An answer can be either correct or incorrect
The probability of a correct answer (P(success)=.20) does
not change from question to question
 Each answer is independent of the others

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Example 7.9 – Pat Statsdud
n=10, and P(success) = .20

What is the probability that Pat gets no answers correct?


I.e. # success, x, = 0; hence we want to know P(x=0)

Pat has about an 11% chance of getting no answers correct


using the guessing strategy

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Example 7.9 – Pat Statsdud
n=10, and P(success) = .20

What is the probability that Pat gets two answers correct?


I.e. # success, x, = 2; hence we want to know P(x=2)

Pat has about a 30% chance of getting exactly two answers


correct using the guessing strategy

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Cumulative Probability
Thus far, we have been using the binomial probability
distribution to find probabilities for individual values of x
To answer the question:

“Find the probability that Pat fails the quiz”

requires a cumulative probability, that is, P(X ≤ x)

If a grade on the quiz is less than 50% (i.e. 5 questions


out of 10), that’s considered a failed quiz
Thus, we want to know what is: P(X ≤ 4) to answer
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Example 7.10 – Pat Statsdud
Find the probability that Pat fails the quiz. A mark is
considered a failure if it is less than 50%
P(X ≤ 4) = P(0) + P(1) + P(2) + P(3) + P(4)
We already know P(0) = .1074 and P(2) = .3020. Using the
binomial formula to calculate the others:
P(1) = .2684 , P(3) = .2013, and P(4) = .0881
We have P(X ≤ 4) = .1074 + .2684 + … + .0881 = .9672
Thus, its about 97% probable that Pat will fail the test
using the luck strategy and guessing at answers…
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Binomial Table
Calculating binomial probabilities by hand is tedious and
error prone. There is an easier way. Refer to Table 1 in
Appendix B. For the Pat Statsdud example, n=10, so the
first important step is to get the correct table!
n = 10
k 0.01 0.05 0.1 0.2 0.25 0.3 0.4 0.5 0.6 0.7 0.75 0.8 0.9 0.95 0.99
0 0.9044 0.5987 0.3487 0.1074 0.0563 0.0282 0.0060 0.0010 0.0001 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
1 0.9957 0.9139 0.7361 0.3758 0.2440 0.1493 0.0464 0.0107 0.0017 0.0001 0.0000 0.0000 0.0000 0.0000 0.0000
2 0.9999 0.9885 0.9298 0.6778 0.5256 0.3828 0.1673 0.0547 0.0123 0.0016 0.0004 0.0001 0.0000 0.0000 0.0000
3 1.0000 0.9990 0.9872 0.8791 0.7759 0.6496 0.3823 0.1719 0.0548 0.0106 0.0035 0.0009 0.0000 0.0000 0.0000
4 1.0000 0.9999 0.9984 0.9672 0.9219 0.8497 0.6331 0.3770 0.1662 0.0473 0.0197 0.0064 0.0001 0.0000 0.0000
5 1.0000 1.0000 0.9999 0.9936 0.9803 0.9527 0.8338 0.6230 0.3669 0.1503 0.0781 0.0328 0.0016 0.0001 0.0000
6 1.0000 1.0000 1.0000 0.9991 0.9965 0.9894 0.9452 0.8281 0.6177 0.3504 0.2241 0.1209 0.0128 0.0010 0.0000
7 1.0000 1.0000 1.0000 0.9999 0.9996 0.9984 0.9877 0.9453 0.8327 0.6172 0.4744 0.3222 0.0702 0.0115 0.0001
8 1.0000 1.0000 1.0000 1.0000 1.0000 0.9999 0.9983 0.9893 0.9536 0.8507 0.7560 0.6242 0.2639 0.0861 0.0043
9 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0.9999 0.9990 0.9940 0.9718 0.9437 0.8926 0.6513 0.4013 0.0956

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Binomial Table
The probabilities listed in the tables are cumulative,
i.e. P(X ≤ k) – k is the row index; the columns of the table
are organized by P(success) = p

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Binomial Table
“What is the probability that Pat gets no answers correct?”
i.e. what is P(X = 0), given P(success) = .20 and n=10 ?

P(X = 0) = P(X ≤ 0) = .1074

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Binomial Table
“What is the probability that Pat gets two answers
correct?” i.e. what is P(X = 2), given P(success) = .20
and n=10 ?

P(X = 2) = P(X≤2) – P(X≤1) = .6778 – .3758 = .3020


remember, the table shows cumulative probabilities…
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Binomial Distribution
What is the probability that Pat fails the quiz”?
i.e. what is P(X ≤ 4), given P(success) = .20 and n=10 ?

P(X ≤ 4) = .9672
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Binomial Table
The binomial table gives cumulative probabilities for
P(X ≤ k), but as we’ve seen in the last example,

P(X = k) = P(X ≤ k) – P(X ≤ [k–1])

Likewise, for probabilities given as P(X ≥ k), we have:


P(X ≥ k) = 1 – P(X ≤ [k–1])

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=BINOMDIST() Excel Function
There is a binomial distribution function in Excel that can
also be used to calculate these probabilities

BINOMDIST([x],[n],[p],[True] or [False])

Typing “True” calculates a cumulative probability and typing


“False” computes the probability of an individual value of X

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
=BINOMDIST() Excel Function
There is a binomial distribution function in Excel that can
also be used to calculate these probabilities. For example:
What is the probability that Pat gets two answers correct?
# successes

# trials

P(success)

cumulative
(i.e. P(X≤x)?)

P(X=2)=.3020
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
=BINOMDIST() Excel Function
There is a binomial distribution function in Excel that can
also be used to calculate these probabilities. For example:
What is the probability that Pat fails the quiz?
# successes

# trials

P(success)

cumulative
(i.e. P(X≤x)?)

P(X≤4)=.9672
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Binomial Distribution
As you might expect, statisticians have developed general
formulas for the mean, variance, and standard deviation of
a binomial random variable. They are:

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Example 7.11 – Pat Statsdud
Suppose that a professor has a class full of students like
Pat and he wants to find out the mean marks and the
standard deviation

Mean = µ = np = 10 * 0.2 = 2

Standard Deviation = σ = np(1 − p ) = 10*0.2*0.8 = 1.26

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Exercise 1– Binomial Distribution
A sign on the gas pumps of a chain of gasoline stations
encourages customers to have their oil checked with the
claim that one out of four cars needs to have oil added. If
this is true, what is the probability of the following events?

a.One out of next four cars needs oil


b.Two out of next eight cars need oil
c.Three out of next twelve cars need oil

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Exercise 1– Binomial Distribution (Using Formula)
p = Probability of cars needing oil = ¼ = 0.25
a.One out of next four cars needs oil
In this case n = 4 and we want to determine P(X=1)
4! 4 −1 4!
P( X = 1) = 0.25 (1 − 0.25) =
1
0.251 *0.753 = 0.4219
1!(4 − 1)! 1!3!
b.Two out of next eight cars need oil
In this case n = 8 and we want to determine P(X=2)
8! 8− 2 8!
P( X = 2) = 0.25 (1 − 0.25) =
2
0.252 *0.756 = 0.311
2!(8 − 2)! 2!6!
c.Three out of next twelve cars need oil
In this case n = 12 and we want to determine P(X=3)
12! 12 − 3 12!
P( X = 3) = 0.25 (1 − 0.25) =
3
0.253 *0.759 = 0.258
3!(12 − 3)! 3!9!
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Exercise 1– Binomial Distribution (Using Table)
p = Probability of cars needing oil = ¼ = 0.25
a.One out of next four cars needs oil
In this case n = 4 and we want to determine P(X=1)
P(X = 1) = 0.422

b.Two out of next eight cars need oil


In this case n = 8 and we want to determine P(X=2)
P(X ≤ 2) – P(X ≤ 1) = 0.6785 – 0.3671 = 0.3114

c.Three out of next twelve cars need oil


In this case n = 12 and we want to determine P(X=3)
P(X ≤ 3) – P(X ≤ 2) = 0.649 – 0.391 = 0.258

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
Exercise 1– Binomial Distribution (Using Excel)
p = Probability of cars needing oil = ¼ = 0.25
a.One out of next four cars needs oil
In this case n = 4 and we want to determine P(X=1)
=BINOMDIST(1,4,0.25,FALSE) = 0.421875
b.Two out of next eight cars need oil
In this case n = 8 and we want to determine P(X=2)
P(X ≤ 2) – P(X ≤ 1) = 0.6785 – 0.3671 = 0.3114
=BINOMDIST(2,8,0.25,FALSE) = 0.311462
c.Three out of next twelve cars need oil
In this case n = 12 and we want to determine P(X=3)
=BINOMDIST(3,12,0.25,FALSE) = 0.258104

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Exercise 2– Binomial Distribution
A certain type of tomato seed germinates 90% of the time. A
backyard farmer planted 25 seeds.

a.What is the probability that exactly 20 seeds germinate?


b. What is the probability that 20 or more seeds germinate?
c.What is the probability that 24 or fewer seeds germinate?
d.What is the expected number of seeds that germinate?

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Exercise 2– Binomial Distribution (Using Table)
n = no. of seeds planted = 25
p = probability that seeds germinate = 0.9

a.What is the probability that exactly 20 seeds germinate?


P(X ≤ 20) – P(X ≤ 19) = 0.0980 – 0.0334 = 0.0646

b. What is the probability that 20 or more seeds germinate?


P(X ≥ 20) = 1 - P(X ≤ 19) = 1 – 0.0334 = 0.9666

c.What is the probability that 24 or fewer seeds germinate?


P(X ≤ 24) = 0.9282

d.What is the expected number of seeds that germinate?


µ = np = 25 * 0.9 = 22.5 Seeds
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Exercise 2– Binomial Distribution (Using Excel)
n = no. of seeds planted = 25
p = probability that seeds germinate = 0.9

a.What is the probability that exactly 20 seeds germinate?


=BINOMDIST(20,25,0.9,FALSE) = 0.064594

b. What is the probability that 20 or more seeds germinate?


=1 - BINOMDIST(19,25,0.9,TRUE) = 0.9666

c.What is the probability that 24 or fewer seeds germinate?


=BINOMDIST(24,25,0.9,TRUE) = 0.92821

d.What is the expected number of seeds that germinate?


µ = np = 25 * 0.9 = 22.5 Seeds
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