Means & Variances of Discrete Random Variables

Chap. 7 Sec. 2a

 Expected Value:
Used in situations involving money (gambling, business, etc.). Finds the amount of money to be gained/lost, on average, over the long run. X represents the amount of gain (negative for a loss).

Expected Value
In the Tri-State Pick 3 game you select a threedigit number. The lottery then selects a random three-digit number and if your number is selected, you win $500. If it costs $1 to play what is your expected value?

Using Graphing Calculator Example 7.7 pg. 485

STEPS
1.
1. 2.

Input Data
L1 = X values L2 = Probabilities

2. 3. 4.

1-Var Stats L1,L2 x = mean sx = standard deviation (square this value to get variance)

Probability Distributions & Means

Law of Large Numbers:
As the number of observations drawn increases, the mean of the observed values eventually approaches the mean of the population and stays close to that value. Flipping a Coin example: How many heads would you expect to get if we flipped a coin 7 times?
Lets Simulate!

law of small numbers

Say we flip a coin four times and all four flips result in heads? Which is more likely to occur next, heads or tails? Remember probability only describes the outcomes of an event in the long run!

Pg. 486 7.24-7.28 all pg. 491 7.32-7.34 all

Homework Assignment

BRING YOUR TEXTBOOK TOMORROW!