Read the book "The Drunkard's Walk - How Randomness Rules Our Lives" by Mlodinow and pay special

attend to the following questions. Some of these questions may appear on quizzes and exams. Chapter 1 Peering through the Eyepiece of Randomness 1. Explain the phenomenon "regression toward the mean." 2. What factors determine whether a person will be successful in career, investment, etc.? 3. Was Paramount's firing of Lansing the correct decision? After she was fired, Paramount films market share rebounded. Chapter 2 The Laws of Truths and Half-Truths 1. What coined the term probability, or probabilis? (Latin: probabilis credible) 2. What is the rule for compounding probabilities? How to compute probability that one event and another event both happening? 3. Is the Roman rule of half proofs: two half proofs constitute a whole proof, correct? What do two half proofs constitute by the rule of compounding probabilities? 4. Suppose an airline has 1 seat left on a flight and 2 passengers have yet to show up. If there is a 2 in 3 chance a passenger who books a seat will arrive to claim it, what is the probability that the airline will have to deal with an unhappy customer? What is the probability that neither customer will show up? What is the assumption? What is the probability that either both passengers or neither passenger will show up? 5. In DNA testing for legal trial, there is 1 in 1 billion accidental match and 1 in 100 laberror match. What is the probability that there is both an accidental match and a lab error? What is the probability that one error or the other occurred? Which probability is more relevant? Chapter 3 Finding Your Way through a Space of Possibilities 1. What is "sample space"? 2. What is Cardano's law of the sample space? (P. 62) 3. In the Monty Hall problem, why should the player switch after the host's intervention? Chapter 4 Tracking the Pathways to Success 1. The grand duke of Tuscany's problem: what is the probability of obtaining 10 when you throw three dice? What about 9? 2. What is Cardano's law of the sample space? 3. What is the application of Pascal's triangle? 4. For the Yankees-Braves World Series example, for the remaining 5 games, what is the probability that the Yankees win 2 games? 1 game? 5. What is mathematical expectation? 6. Explain why a state lottery is equivalent to: Of all those who pay the dollar or two to enter, most will receive nothing, one person will receive a fortune, and one person will be put to death in a violent manner? Chapter 5 The Dueling Laws of Large and Small Numbers? 1. What is Benford's law? Discuss some applications in business. 2. Explain the difference between the frequency interpretation and the subjective interpretation of randomness. 3. Do psychics exist? 4. What is tolerance of error, tolerance of uncertainty, statistical significance? 5. Describe some applications from the book of the law of large numbers and the law of small numbers. Chapter 6 Bayes's Theory 1. Two-daughter problem In a family with two children, what are the chances that both children are girls? In a family with two children, what are the chances, if one of the children is a girl, that both children are girls?

In a family with two children, what are the chances, if one of the children is a girl named Florida, that both children are girls? 2. How to apply Bayes's Theory to determine car insurance rates? 3. Probability of correct diagnosis Suppose in 1989, statistics from the Centers for Disease Control and Prevention show about 1 in 10,000 heterosexual non-IV-drug-abusing white male Americans who got tested were infected with HIV. Also suppose about 1 person out of every 10,000 will test positive due to the presence of the infection. Suppose 1 in 1,000 will test positive even if not infected with HIV (false positive). What is the probability that a patient who tested positive is in fact healthy? 4. O. J. Simpson trial According to FBI statistics, 4 million women are battered annually by husbands and boyfriends in U.S. and in 1992 1,432 or 1 in 2500 were killed by their husbands or boyfriends. The probability that a man who batters his wife will go on to kill her is 1 in 2500. The probability that a battered wife who was murdered was murdered by her abuser is 90%. Which probability is relevant to the O. J. trial? What is the fundamental difference between probability and statistics? Chapter 7 Measurement and the Law of Errors 1. Election Why did the author argue that "when elections come out extremely close, perhaps we ought to accept them as is, or flip a coin, rather than conducting recount after recount?" 2. What is mathematical statistics? 3. Wine tasting Should we believe in wine ratings from those "wine experts"? Why or why not? Two groups wine tasting experts produce the following results: (a) 90 90 90 90 90 90 90 90 90 90 90 90 90 90 90 (b) 80 81 82 87 89 89 90 90 90 91 91 94 97 99 100 Compare the two groups of data. 4. Can professional mutual fund managers (stock pickers) beat students who pick stocks by tossing coins? 5. What is the margin of error in a poll? Should variation within the margin of error be ignored in a poll? 6. What is the central limit theorem? Chapter 8 The Order in Chaos 1. Who are the founders of statistics? 2. How did Graunt estimate the population of London in 1662? What is Graunt's legacy? 3. How did Poincare show the baker was shortchanging customers? 4. Are all data in society such as financial realm normal? Are film revenue data normal? 5. Who dubbed the phenomenon "regression toward the mean"? Explain its meaning. 6. Who coined the term "the coefficient of correlation"? Explain its meaning. 7. Discuss the applications of the chi-square test? 8. What is statistical physics? 9. What is a drunkard's walk or random walk? Chapter 9 Illusions of Patterns and Patterns of Illusion 1. What caused the table to move, spirit? 2. What is significance testing? 3. Why did Apple founder Steve Jobs made the ipod's shuffling feature "less random to make it feel more random"? 4. Suppose there are 1000 mutual fund managers picking stock for 15 consecutive years by each tossing a coin once a year. If a head is obtained, he/she beats the market (a fund manager either beats the market average or not). What is the probability that someone among the 1000 who would toss a head in each of the 15 years? From Nobel Prize-winning economist Merton Miller: "If there are 10,000 people looking at the stocks and trying to pick winners, one in 10,000 is going score, by chance alone, and that's all that's going on. It's a game, it's a chance operation, and people think they are doing

something purposeful but they're really not." 5. What is confirmation bias? Chapter 10 The Drunkard's Walk 1. What is the butterfly effect? 2. Can past performance of mutual fund managers predict future performance?