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Probability Basics and Analysis Problems

The document discusses probability basics, including calculations for expected values (E) and standard deviations (SD) for various variables. It highlights the differences between discrete and continuous variables, emphasizing the practicality of continuous models for analysis. Additionally, it presents conditional probabilities related to specific scenarios involving positive and negative outcomes.

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davidskrul987
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3 views3 pages

Probability Basics and Analysis Problems

The document discusses probability basics, including calculations for expected values (E) and standard deviations (SD) for various variables. It highlights the differences between discrete and continuous variables, emphasizing the practicality of continuous models for analysis. Additionally, it presents conditional probabilities related to specific scenarios involving positive and negative outcomes.

Uploaded by

davidskrul987
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Nadrah Aldaeefi

5202415

Chapter 07: Probability Basics

Problems: 7, 12, 16, 23

CMGT 505 – DECISION ANALYSIS

October 2, 2024

1
7)
E(AB)= 6.1%
E(CD)= 5.0%
E(EF)= 9.0%
SD(X)=√ Var (X ¿)¿

Var(AB)= 0.15 ¿

SD(AB)=√ 0.0019=0.043=4.3 %

Var(CD)= 0.15 ¿

SD(CD)=√ 0.00 03=0.0 18=1.8 %

Var(EF)= 0.15 ¿

SD(EF)=√ 0.0 243=0.156=15.6 %

12) The main difference between discrete and continuous variables is that discrete variables
take many possible values while continuous variables take an infinite number of values
within a specified interval. In most cases, it is not feasible to utilize a discrete model due to
the large number of possible outcomes. The continuous model is convenient since it makes it
possible to make a model and do an analysis.

16)
E(X) = (1 - p) (0) + p (1) = p
Var(X) = (1 - p) (0 - p)2 + p (1 - p)2
= (1 - p) p2 + p (1 - p)2
= (1 - p) p[p + (1 - p)]
= (1 - p) p

23)
P (TR Positive | CP High) = 0.82
P (FR Positive | CP High) = 0.95
P (TR Positive and FR Positive | CP High) = 0.82 x 0.95 = 0.779

P (TR Positive | CP High) = 0.82


P (FR Negative | CP High) = 0.05
P (TR Positive and FR Negative | CP High) = 0.82 x 0.05 = 0.041
P (TR Negative | CP Low) = 0.79
P (FR Negative | CP Low) = 0.83

2
P (TR Negative and FR Negative | CP Low) = 0.79 x 0.83 = 0.6557

P (TR Negative | CP Low) = 0.79


P (FR Positive | CP Low) = 0.17
P (TR Negative and FR Positive | CP low) = 0.79 x 0.17 = 0.1343

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