Dr. Saeed A.

Dobbah Alghamdi

Department of Statistics
Faculty of Sciences
Building 90, Office 26F41
King Abdulaziz University
http://saalghamdy.kau.edu.sa

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 Statistics
for
Business & Economics

David R. Anderson
Dennis J. Sweeney
Thomas A. Williams
Copyright © South-Western Cengage Learning All rights reserved.

© All rights are preserved for Dr. Saeed A. Dobbah Alghamdi, Department of Statistics, Faculty of Sciences, KAU
 Continuous
Probability
Distributions
Chapter 6

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 Learning Objectives
LO1 Understand the difference between how probabilities are
computed for discrete and continuous random variables.
LO2 List the characteristics of the normal probability distribution.
LO3 Convert a normal distribution to the standard normal
distribution.
LO4 Find the probability of a normally distributed random variable.
LO5 Find specific data values for given probabilities using the
standard normal distribution.
LO6 Find probabilities using the Empirical Rule.

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 Probability Distribution
◼ A fundamental difference separates discrete and continuous random
variables in terms of how probabilities are computed. For a discrete
random variable, the probability function p(x) provides the probability
that the random variable assumes a particular value.
◼ With continuous random variables the counterpart of the probability
function is the probability density function, denoted by f(x).
◼ The difference is that the probability density function does not directly
provide probabilities. However, the area under the graph of f(x)
corresponding to a given interval does provide the probability that the
continuous random variable X assumes a value in that interval. So when
we compute probabilities for continuous random variables we are
computing the probability that the random variable assumes any value
in an interval.
◼ One of the implications of the definition of probability for continuous
random variables is that the probability of any particular value of the
random variable is zero,
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 Normal Probability Distribution
◼ The most important probability distribution for describing a continuous random
variable is the normal probability distribution.
◼ The normal distribution has been used in a wide variety of practical
applications in which the random variables are heights and weights of people,
test scores, scientific measurements, amounts of rainfall and so on.
◼ It is also widely used in statistical inference, which is the major topic of the
remainder of this book.
◼ In such applications, the normal distribution provides a description of the likely
results obtained through sampling.
◼ The normal distribution curve is bell-shaped and has a single peak at the center
of the distribution.

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 The Characteristics of Normal Distribution
1. The entire family of normal distributions is differentiated by its mean μ and
its standard deviation σ.
2. The highest point on the normal curve is at the mean, which is also the
median and mode of the distribution.
3. The normal distribution is symmetric, with the shape of the curve to the left
of the mean a mirror image of the shape of the curve to the right of the mean.
4. The mean of the distribution can be any numerical value: negative, zero or
positive.

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 The Characteristics of Normal Distribution
5. The standard deviation determines how flat and wide the curve is. Larger
values of the standard deviation result in wider, flatter curves, showing more
variability in the data.

6. Probabilities for the normal random variable are given by areas under the
curve. The total area under the curve for the normal distribution is 1. Because
the distribution is symmetric, the area under the curve to the left of the mean
is 0.50 and the area under the curve to the right of the mean is 0.50.

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 The Characteristics of Normal Distribution
7. The percentage of values in some commonly used intervals are:
a. 68.3 per cent of the values of a normal random variable are within plus or
minus one standard deviation of its mean.
b. 95.4 per cent of the values of a normal random variable are within plus or
minus two standard deviations of its mean.
c. 99.7 per cent of the values of a normal random variable are within plus or
minus three standard deviations of its mean.

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 Standard Normal Probability Distribution
◼ The standard normal distribution is a normal distribution with a mean of 0
and a standard deviation of 1.
◼ It is also called the z distribution.
◼ A z-value is the number of standard deviations between a selected value,
designated X, and the population mean . A positive value means the value
is above the mean and a negative value means the value is below the mean.
◼ All normally distributed variables can be transformed into the standard
normally distributed variable by using the z value.

x-
Z=


 x 0 z
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 The Normal Distribution – Example
The weekly incomes of shift foremen in a glass industry follow the
normal probability distribution with a mean of $1,000 and a
standard deviation of $100.
What is the z value for the income, let’s call it X, of a foreman who
earns $1,100 per week?

For a foreman who earns $900 per week?

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 Normal Distribution – Finding Probabilities
EXAMPLE
The mean weekly income of a shift foreman in a glass industry is normally
distributed with a mean of $1,000 and a standard deviation of $100.
What is the likelihood of selecting a foreman whose weekly income is
between $1,000 and $1,100?

normal distribution
P(lower) P(upper) z X mean std.dev
.5000 .5000 0.00 1000 1000 100

normal distribution
P(lower) P(upper) z X mean std.dev
.8413 .1587 1.00 1100 1000 100

Hence,

P(1000 <= x <= 1100)=0.8413-0.5=0.3413

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 Normal Distribution – Finding Probabilities
EXAMPLE
Refer to the information regarding
the weekly income of shift foremen
in a glass industry. The distribution
of weekly incomes follows the
normal distribution
normal probability distribution with P(lower) P(upper) z X mean std.dev
a mean of $1,000 and a standard .0179 .9821 -2.10 790 1000 100
deviation of $100. Hence, P(790 < X <1000)=0.9821 - 0.5 = 0.4821
What is the probability of selecting
a shift foreman in the glass industry
whose income is between $790 and
$1,000?
What is the probability of selecting
a shift foreman in the glass industry normal distribution
P(lower) P(upper) z X mean std.dev
whose income is between $840 and .0548 .9452 -1.60 840 1000 100
$1,200 P(lower) P(upper) z X mean std.dev
.9772 .0228 2.00 1200 1000 100
Hence, P(840 < X < 1200)=0.9772-0.0548=0.9224

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 Using Z in Finding X Given Area - Example
Layton Tire and Rubber Company Solve X using the formula:
wishes to set a minimum mileage 𝑥 − 𝜇 𝑥 − 67,900
z= =
guarantee on its new MX100 tire. Tests 𝜎 2,050
reveal the mean mileage is 67,900 with a The value of z is found using the 4% information
standard deviation of 2,050 miles and The area between 67,900 and x is 0.4600, found
that the distribution of miles follows the by 0.5000−0.0400
normal probability distribution. Layton Using standard normal distribution, the area
wants to set the minimum guaranteed closest to 0.4600 is 0.4599, which gives a z alue
mileage so that no more than 4 percent of −1.75. Then substituting into the equation:
of the tires will have to be replaced. x−67,900
−1.75 = , then solving for x
What minimum guaranteed mileage 2,050
−1.75(2,050) = x−67,900
should Layton announce?
x = 67,900−1.75(2,050) = 64,312

normal distribution
P(lower) P(upper) z X mean std.dev
.0400 .9600 -1.75 64,311.0936 67900 2050

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 The Empirical Rule

◼ About 68 percent of the area under the normal curve is within one
standard deviation of the mean.
◼ About 95 percent is within two standard deviations of the mean.
◼ Practically all is within three standard deviations of the mean.

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 The Empirical Rule - Example
As part of its quality assurance
program, the Autolite Battery
Company conducts tests on battery
life. For a particular D-cell alkaline
battery, the mean life is 19 hours.
The useful life of the battery
follows a normal distribution with
a standard deviation of 1.2 hours.

Answer the following questions.

1. About 68 percent of the
batteries failed between what
two values?
2. About 95 percent of the
batteries failed between what
two values?
3. Virtually all of the batteries
failed between what two
values?

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 Summary
The major conceptual difference between discrete and continuous
probability distributions involves the method of computing probabilities.
The probability of any particular value is zero for a continuous random
variable.
Probability density function A function used to compute probabilities for
a continuous random variable. The area under the graph of a probability
density function over an interval represents probability.
Normal probability distribution A continuous probability distribution.
Its probability density function is bell-shaped and determined by its mean
μ and standard deviation σ.
Standard normal probability distribution Anormal distribution with a
mean of zero and a standard deviation of one.

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