NOTION OF RANDOM

VARIABLES AND BINOMIAL

AND POISSON
DISTRIBUTION
by-Akshita Goel

Astha Savyasachi

RANDOM VARIABLES

In many experiments the outcomes of the experiment can be

assigned numerical values. For instance, if you roll a die, each
outcome has a value from 1 through 6.
A random variable is just a rule that assigns a number to each
outcome of an experiment and takes specified with specified
probabilities. These numbers are called the values of the random
variable. We often use letters like X, Y and Z to denote a random
variable. Here are some examples
Examples
1. Experiment: Select a mutual fund; X = the number of
companies in the fund portfolio.
The values of X are 2, 3, 4, ...
2. Experiment: Select a soccer player; Y = the number of goals the
player has scored during the season.
The values of Y are 0, 1, 2, 3, ...
3. Experiment: Survey a group of 10 soccer players; Z = the
average number of goals scored by the players during the season.
The values of Z are 0, 0.1, 0.2, 0.3, ...., 1.0, 1.1, ...

Discrete and Continuous Random Variables

A discrete random variable can take on only specific,
isolated numerical values, like the outcome of a roll of a
die, or the number of dollars in a randomly chosen bank
account. Discrete random variables that can take on
only finitely many values (like the outcome of a roll of a
die) are called finite random variables. Discrete random
variables that can take on an unlimited number of
values (like the number of stars estimated to be in the
universe) are infinite discrete random variables.
A continuous random variable, on the other hand, can
take on any values within a continuous range or an
interval, like the temperature in Central Park, or the
height of an athlete in centimeters.

RandomVariable

Values

Type

Flipacointhreetimes;X=thetotal
numberofheads.

{0,1,2,3}

Finite
Thereareonlyfour
possiblevaluesforX.

Selectamutualfund;X=the
numberofcompaniesinthefund
portfolio.

{2,3,4,...}

DiscreteInfinite
Thereisnostated
upperlimittothesize
oftheportfolio.

Measurethelengthofanobject;X= Anypositiverealnumber
itslengthincentimeters.

Continuous
Thesetofpossible
measurementscan
takeonanypositive
value.

PROBABILITY DISTRIBUTION

It consists of mutually exclusive and exhaustive

compilation of all random events that can occur for a
particular process and probability of each event occuring.
If a random variable is a discrete variable, its probability
distribution is called a discrete probability
distribution.
If a random variable is a continuous variable, its
probability distribution is called a continuous
probability distribution .

PROBABILITY FUNCTION If the function permits us to

compute the probability for any event that is defined in
terms of the random variable, then the functions is called a
probability functions

THE DISCRETE PROBABILITY

FUNCTION
The probability distribution of a discrete random
variable is called the discrete probability
function.
Two type: probability mass function
Cumulative mass function

PROBABILITY MASS FUNCTION

A probability function that any single value of a discrete random variable

will occur is called the probability mass function.

Suppose a random variable X may take k different values, with the

probability that X = xi defined to be P(X = xi) = pi. The probabilities pi
must satisfy the following:
1: 0 < pi < 1 for each i
2: p1 + p2 + ... + pk = 1.

CUMULATIVE MASS FUNCTION

All random variables (discrete and continuous) have a cumulative distribution

function. It is a function giving the probability that the random variable X is less than
or equal to x, for every value x. For a discrete random variable, the cumulative
distribution function is found by summing up the probabilities

P(X)
.1
.3
.4
.2
The cumulative distribution function for the above probability distribution is calculated
as follows:
The probability that X is less than or equal to 1 is 0.1,
the probability that X is less than or equal to 2 is 0.1+0.3 = 0.4,
the probability that X is less than or equal to 3 is 0.1+0.3+0.4 = 0.8, and
the probability that X is less than or equal to 4 is 0.1+0.3+0.4+0.2 = 1.

CONTINOUS PROBABILITY
FUNCTION
A probability function for continuous random
variable is called continuous probability function
since the domain of function is continuous
probability function.
It can be also defined in terms of probability
density function and cumulative density function.

EXPECTED VALUE AND

VARIANCE

The average value of random variable is called expected value.The

expected value is often referred to as the "long-term"average or
mean .

To find the expected value or long term average, , simply multiply

each value of the random variable by its probability and add the
products ,

If X is a discrete random variable with probability mass function

p(x), then the expected value becomes

E(X)= x.p(x)=

X = the number of days the men'ssoccer team plays soccer per week. X

takes on the values 0, 1, 2.

P(X=x)

xP(X=x)

0
0.2
(0)(0.2)0,
= 01, OR 2 DAYS A WEEK.
MEN'S SOCCER TEAM
PLAYS SOCCER
1
0.5 THEY PLAY
(1)(0.5)
= 0.5
THE PROBABILITY
THAT
0 DAYS
IS 0.2, THE
PROBABILITY THAT THEY PLAY 1 DAY IS 0.5, AND THE
2
0.3
(2)(0.3) = 0.6
PROBABILITY THAT THEY PLAY 2 DAYS IS 0.3. FIND THE
LOMEN'S NG-TERM AVERAGE, , OR EXPECTED VALUE OF
THE DAYS
PER WEEK
THE SOCCER TEAM 0PLAYS
SOCCER
Expected
value: (0)(0.2)+(1)(0.5)+(2)(0.3)=
+ 0.5. 0.6
= 1.1.

Variance of a probability distribution is defined as the expected value of the

sum of squared deviations of the values of X from mean.

Var(X)=E(X-x)= ()2= (x) 2P(X=x) =E(X2)-(E(X))2

PROBLEMS
P(X=x)

Xp(x)

(x -)2P(X=x)

0.2

0.242

0.5

0.5

0.005

0.3

0.6

0.243

add the entries in the column labeled (x) 2P(X=x) and take the square root for finding standard deviation.

Var(x)=0.242+0.005+0.243=0.490. The standard deviation is the square root 0.4of 9. =\0.49=0.7

PROBLEMS CONTD.

Supposeyouplayagameofchanceinwhichyouchoose5numbersfrom0,
1,2,3,4,5,6,7,8,9.Youmaychooseanumbermorethanonce.Youpay
$2toplayandcouldprofit$100,000ifyoumatchall5numbersinorder
(yougetyour$2backplus$100,000).Overthelongterm,whatisyour
expectedprofitofplayingthegame?

LetX=theamountofmoneyyouprofit),thevaluesofxare100,000dollarsand2
dollars.

Towin,youmustgetall5numberscorrect,inorder.Theprobabilityofchoosing
onecorrectnumberis1/10becausethereare10numbers.Youmaychoosea
numbermorethanonce.Theprobabilityofchoosingall5numberscorrectlyandin
orderis:

1/10*/10*1/10*1/10*1/10=1*105=0.00001(1)

Therefore,theprobabilityofwinningis0.00001andtheprobabilityoflosingis
10.00001=0.99999

P(x=x)

Xp(x=x)

loss

-2

0.999

-1.9998

profit

100,000

0.00001

add the last column. -1.99998 + 1 = -0.99998

Since -0.99998 is about -1, you would, on the average, expect to lose
approximately one dollar for each game you play. However, each time you
play, you either lose $2 or profit $100,000. The $1 is the average or
expected LOSS per game after playing this game over and over.

PROPERTIES OF EXPECTED VALUE

AND VARIANCE

The expected value of constant is equal to

constant. E( c)=c
The expected value of the sum of two independent
random variable is equal to sum of their
individual expected values.
The expected value of the product of two
independent random variable is equal to product
of their individual expected values.
The variance of the product of a constant and a
random variable is equal to constant squred times
the variance of random variable X.
Var(cx)=c2var(X)

The variance of sum of two independent random

variable equals the sum of their individual
variances and the variance of their difference also.
Var(X+Y)=var(X)var(Y)=var(X-Y)

BINOMIAL DISTRIBUTION

It is outcome of Bernoulli process .

BERNOULLI PROCESS is a random process in which

-The process is performed under same conditions and for fixed number of
times
-Each trial is independent of other trials
-Each trial has two mutually exclusive possible outcomes.
-probability of success and failure remains constant for trial to trial
A binomial random variableis a random variable that counts
the number of successes in a sequence ofindependentBernoulli
trials with fixed probability of success.

IfXis the number of successes in a sequence

ofnindependent Bernoulli trials, then
P(X=x) =C(n,x)pxqn-x
n= number of trials
p= probability of success
q= probability of failure = 1-p
This formula for the probability distribution of the
no. of successes in a series of Bernoullis trial is
called the binomial probability distribution.

MEAN AND VARIANCE OF BINOMIAL

DISTRIBUTION

Mean: It is the theoritical expected number of

successes in n trials
=E(X)= x.f(x) =np

Variance: It measures the variation of the

binomial distribution.
()2 = E(X2)- 2 =npq

BINOMIAL DISTRIBUTION
CONTD
The expression for binomial distribution is

(q+p)n=qn +nC1q n-1p + nC2 qn-2 p2 +.+pn

Where p=probability of success
q=probability of failure
n=no.of trials
The coefficients of terms are nC1 ,nC2 etc. which
are called the binomial coefficients.
Pascals triangle is a good way to determine the
coefficients.

PROBLEMS BASED ON BINOMIAL

DISTRIBUTION

A coin is tossed 6 times. What is the probability

of obtaining 4 or more heads?

Solution:-(q+p)=q6+6q5p1+15q4p2+20q3p3+15q2p4
+6q1p5+p6
The probability of getting 4 or more heads is=
15*(1/4)*(1/16)+6*(1/2)*(1/32)+(1/64)=.344

PROBLEMS CONTD.

5 Fair coins were tossed 100 times. From the

following items calculate expected frequency.

No. of

heads up
Observed
frequency

10

24

38

18

No.of heads

P(r)

N.P(r)

.03125

3.125

.15625

15.625

.3125

31.25

.3125

31.25

.15625

15.625

.03125

3.125

PROBLEMS CONTD..

The screws produced by a certain machine were

checked by examining samples of 128. The
following table shows the distribution of 128
samples acc. to no. of defective items they
contain.
No. of

defective
No.of
samples

Tot
al

19

35

30

23

128

PROBLEMS CONTD

In a binomial distibution consisiting of 5

independent trials ,probabilities of 1 and 2
successes are .4096 and .2048.Find the
parameter p of the distribution.
Solution: P(r=1)=.4096=5q4p
P(r=2)=.2048=10q3p2
Ans=> p=1/5

PROBLEMS CONTD..

How many tosses of a coin are needed so that the

probability of getting atleast one head is 87.5%?
Solution: 1-pn=7/8
(1/8)=(1/2)n
=>n=3

POISSON DISTRIBUTION
It may be expected in case where the chance of
any individual event being a success is small.
It is used to describe the behaviour of rare events
such as the no. of accidents on the road, no. of
printing errors in a book etc.
It is a limiting case of binomial distribution.
It is also called the law of improbable events

P(r)=e-mmr
`
r!

The poisson distribution can frequently be used

to approximate the binomial distribution under
the following conditions:
1)no. of trials n is indefinitely large.
2)Probability of success for each trial is indefinitely
small.

Poisson distribution may be used in place of

binomial distribution where n>=20 and P=<0.1

CONSTANTS OF POISSON
DISTRIBUTION
Mean of poisson distribution is m =np
Variance is =m

ROLE OF POISSON DISTRIBUTION

It is used in quality control methods to find out
the number of defects in an item.
In biology to count the no. of bacteria
In determining the no. of deaths in a district in a
given period.

Thus, poisson distribution is used in the cases

where the probability of occurrence of event is
small and total no. of cases is sufficiently large.

PROBLEMS BASED ON POISSON

DISTRIBUTION
Suppose on an average 1 house in 1,000 in a
certain district has a fire during a year .If there
are 2,000 houses in that district ,what is the
probability that exactly 5 houses will have a fire
during the year?
Solution:-Mean=n*p=2000*(1/1000)=2
P(r)=e-2 m5
5!
=.36

FITTING A POISSON DISTRIBUTION

First we have to calculate the value of m i.e the
average occurrence and then calculate the
frequency . The frequencies can be calculated as
follows:
N(P0)=Ne-m

N(P1)=N(P0)*(m/1)

N(P2)=N(P1)*(m/2)

PROBLEMS CONTD.

In a certain factory manufacturing razor blades ,

there is a small chance 1/50 for any blade to be
defective.The blades are packed in packets , each
containing 10 blades. Using the poisson
distribution ,calculate the approximate number
of packets containing not more than 2 defectives
in a consignment of 10,000 packets.

PROBLEMS CONTD

The following mistakes per page were observed in

a book:Fit a poisson distribution to the data

No. of

mistakes

211

90

19

per page
no. of
times the
mistakes
occured

fx

211

frequency
209.3

90

90

92.09

19

38

20.26

15

2.97

0.34

Here mean= f x/ f=0.44

Expected