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8.2. Standard Normal pdf CDF
8.2 Discrete Probabilities
8.2 Probability Matrix
8.2 Bayes Theorem p37-38
8.2. Bayes Theorem p41
8.2 Bayes Theorem p43
302.2
302.3
Sheet6
Sheet1 (5)
Sheet1 (6)
Sheet1 (7)
Sheet1 (4)
Sheet1 (3)
Sheet1 (2)
Sheet1
Sheet2
normal
mean 0
variance 1
std dev 1
X normal
(4.0) 0.013%
(3.9) 0.020% standard normal
(3.8) 0.029% 45.000%
(3.7) 0.042% 40.000%
(3.6) 0.061% 35.000%
(3.5) 0.087% 30.000%
(3.4) 0.123% 25.000%
(3.3) 0.172% 20.000%
(3.2) 0.238% 15.000%
(3.1) 0.327% 10.000%
(3.0) 0.443% 5.000%
(2.9) 0.595% 0.000%
(2.8) 0.792% ) ) ) ) ) ) ) ) ) ) )
.0 .6 .2 .8 .4 .1 .7 .4 .0 .6 .2 .2 .6 .0 .4 .8 .2 .6 .0
(2.7) 1.042% (4 (3 (3 (2 (2 (2 (1 (1 (1 (0 (0 0 0 1 1 1 2 2 3
(2.6) 1.358%
(2.5) 1.753%
(2.4) 2.239%
1% (2.3) 2.665% 2.665%
(2.3) 2.833%
(2.2) 3.547%
(2.1) 4.398%
(2.0) 5.399%
(1.9) 6.562%
(1.8) 7.895%
(1.7) 9.405%
5% (1.6) 10.314% 10.314%
(1.6) 11.092%
(1.5) 12.952%
(1.4) 14.973%
(1.3) 17.137%
(1.2) 19.419%
(1.1) 21.785%
(1.0) 24.197%
(0.9) 26.609%
(0.8) 28.969%
(0.7) 31.225%
(0.6) 33.322%
(0.5) 35.207%
(0.4) 36.827%
(0.3) 38.139%
(0.2) 39.104%
(0.1) 39.695%
0.0 39.894%
0.1 39.695%
0.2 39.104%
0.3 38.139%
0.4 36.827%
0.5 35.207%
0.6 33.322%
0.7 31.225%
0.8 28.969%
0.9 26.609%
1.0 24.197%
1.1 21.785%
1.2 19.419%
1.3 17.137%
1.4 14.973%
1.5 12.952%
1.6 11.092%
1.7 9.405%
1.8 7.895%
1.9 6.562%
2.0 5.399%
2.1 4.398%
2.2 3.547%
2.3 2.833%
2.4 2.239%
2.5 1.753%
2.6 1.358%
2.7 1.042%
2.8 0.792%
2.9 0.595%
3.0 0.443%
3.1 0.327%
3.2 0.238%
3.3 0.172%
3.4 0.123%
3.5 0.087%
3.6 0.061%
3.7 0.042%
3.8 0.029%
3.9 0.020%
4.0 0.013%
rmal
2 6 0 4 8 2 6 0 4 8
0. 0 . 1. 1. 1. 2. 2. 3 . 3. 3.
X X^2 p(x)
1 1 1.8% 0.01818 0.17370
2 4 7.3% 0.14545 0.31796
3 9 16.4% 0.49091 0.19474
4 16 29.1% 1.16364 0.00240
5 25 45.5% 2.27273 0.37566
sum 55.0 4.09091 1.06446
a= 0.018182 1.03173
3.05918
p = f(x) = p*
x x^3 a*x^3 x*f(x) (x- mu)
1 1 2.78% 0.028 0.082
2 8 22.22% 0.444 0.116
3 27 75.00% 2.250 0.058
Sum: 36 2.722 0.256
a= 0.02778 SQRT: 0.506
Table 2-2 and 2-3: Gujarati's illustration of bivariate (joint) random variable (Tables below)
On the difference between marginal (unconditional), joint, and conditional probability
CONDITIONAL Prob. that 2 PC(s) are sold, given 1 printers are sold: 0.375
i.e., = P ( 2 PC | 1 Printer )
Table 2-2: Frequency Distribution of Two Random Variables: Number of PCs sold and Number of Printers Sold
Under Out
QE 0.0600 0.1400 0.20
not QE 0.4800 0.3200 0.80
30.4%
Q(1) = QE 4, Q(2) = not QE 4
P = OutPerform, P' = UnderPerf
Conditional Prob
Prob (P | Q[i]) Prob (P' | Q[i]) P
Q(1) = Yes QE = Q 20.0% 70.0% 30.0% Q(1) 14.00%
Q(2) = No QE = Q' 80.0% 40.0% 60.0% Q(2) 32.00%
46.00%
P[Q(1)|P] 30.4%
P'
6.00% 20.00%
48.00% 80.00%
54.00% 100.00%
Question Setup:
Good Neutral Poor
20% 30% 50%
Increase 80% 50% 15%
Constant 10% 20% 15%
Decrease 10% 30% 70%
Investment Grade
Survive Default
Junk Survive 96.030% 0.940% 97%
Bond Default 2.970% 0.060% 3.0%
99% 1%
89.300% 4.700%
5.400% 0.600%
1.98%
Joint Post
(1) Prior Cond'l Prob Prob
Events P[A(i)] P(B|A) P(B'|A) A&B P(A|B)
A(1) 0.65 0.02 0.98 0.0130 0.42623
A(2) 0.35 0.05 0.95 0.0175 0.57377
P(B) 0.0305 1.00
G B
A1 0.6370 0.0130
A2 0.3325 0.0175
3% 2% 1%
97% 98% 99%
Economy
Downturn Stable Growth
Survive 19.40% 49.00% 29.70% 98.10%
Bond B
Default 0.60% 1.00% 0.30% 1.90%
0.116400%
Joint Post
(1) Prior Cond'l Prob Prob
Events P[A(i)] P(B|A) P(B'|A) A&B P(A|B)
A(1) 0.65 0.02 0.98 0.0130 0.42623
A(2) 0.35 0.05 0.95 0.0175 0.57377
P(B) 0.0305 1.00
G B
A1 0.6370 0.0130
A2 0.3325 0.0175
Guj 2.12 L1.35 3.22
P(A) 0.5 0.666667 1.0% P(B1) 20%
P(A') 0.5 0.333333 0.99 P(B2) 30%
P(B3) 50%
P(B|A) 1 0.333333 0.800
P(B|A') 0.5 1.000 0.100 P(A|Bx) 4%
P(A|Bx) 3%
P(B) 0.75 0.555556 0.107 P(A|Bx) 2%
P(A|B) 0.666667 0.4000 0.0748
P(B1 | A) 29.6%
0.800%
10.700%
7.48%
35.2
50%
30%
20%
3.0%
2.0%
1.0%
65.2%
26.1%
8.7%
4% 3.0%
3% 2.0%
2% 1.0%
29.6% 65.2%
26.1%
8.7%
29 0.333333 29.33333
234.6667
P(G) 70% 80% 56.00% 56.000%
20% 14.00% 65.00%
P(G') 30% 30% 9.00% 86.15%
70% 21.00%
100.00%
3.0%
2.0%
1.0%
65.2%
26.1%
8.7%
4% 3.0%
3% 2.0%
2% 1.0%
29.6% 65.2%
26.1%
8.7%
29 0.333333 29.33333
234.6667
P(G) 70% 80% 56.00% 56.000%
20% 14.00% 65.00%
P(G') 30% 30% 9.00% 86.15%
70% 21.00%
100.00%