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Continuous Probability Distributions - Probability Concepts

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1. How may a company use probability to determine whether or not it is feasible to use primary data in a research study? Explain your answer.

2. Should a company make a decision based solely on probability instead of doing a research study? Justify your answer.

3. Does the number of students in this class affect your chances of receiving an A? Why or why not?

4. Why do we want to assume that our sample data represent a population distribution?

5. What do confidence intervals represent?

6. What are the differences between z-statistics and t-statistics?

7. In regards to the stock market returns, what is the significance of the Law of Large Numbers?

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Solution Preview

1. Primary data can be very useful to a company in researching the effectiveness of a particular product or a service launched in the market, or simply comparing between two products or services. For example, if an electronics company launches gadget A and gadget B in the market at the same time, and wants to ascertain whether gadget A appeals more to the public, it may collect responses from two samples of consumers who have purchased A or B, and could use this primary data into research analysis to decide which gadget has a better mass appeal.

2. No, both probability analysis and research studies are required to make correct decisions. Probability analysis is simply theoretical, with numerical values which may or may not be well-founded. A ...

Solution Summary

The solution discusses how a company may use probability to determine whether or not it is feasible to use primary data in a research study.