Probability Concepts and the Standard Normal Distribution

Hi, I need some assistance with the following two questions. I am not sure that I understand the questions fully. Any assistance would be appreciated.

1. What are some conditions under which business decisions are made using probability concepts? Provide at least two examples of subjective probability.
2. What are the characteristics of Standard Normal Distribution. Explain with examples. Your response should be around 250 words in length.

Solution Preview

Hi, I hope that this helps!

1. Probability theory is used extensively in business. For example, suppose you are planning an outdoor promotion that costs $100,000 and will generate a $30,000 profit. However, there is a 20% chance of rain that day. Should you go ahead with the promotion or cancel due to the chance of rain?

To solve this problem, we do a probability analysis. If it does rain, you will lose $100,000 and if it does not, you will earn $30,000. Thus, your expected profit is (0.2)(-$100,000) + (0.8)($30,000) = -$20,000 + $24,000 = +$4,000. Thus it is worthwhile not to cancel the ...

Solution Summary

We give two examples of how probability theory can be used in business and describe basic properties of the normal distribution. Response includes over 400 words.

Probability Concepts and Discussion. ... you need to calculate all three probabilities in the ... are generally preferred over the non-probability (subjective) samples. ...

... 4. When working with the normal distribution to find probabilities, we often have to subtract the probability value that we found in the table from .5 ...

Basic Concepts in Probability Distributions. QUESTION 1 A continuous uniform distribution U(100,200) will have the same standard deviation as a continuous ...

... z is the standard normal score, which ... focusing on probability, binomial probability distribution, normal probability concepts, etc. ... of the probabilities of all ...

Expected Value. z-scores and other statistics concepts. ... This solution gives the step by step method for computing probabilities based on Z score. ...

... follows (or roughly follows) a normal distribution and the standard deviation is ... The answer is joint probability. This solution considers statistics concepts. ...

... The solution is very helpful to understand the concept of these types of ... What is the probability of selecting a credit card customer at ...Normal Probabilities. ...

... The solution is very helpful to understand the concept of these types ... Solution: Normal Probabilities. ...Probability for X <= X Value 600 Z Value 0.6428571 P(X<=600 ...

Probabilities: Mean, Normal Distribution and Standard Deviation. ... c) What is the probability that the woman ... with a clear perspective of the underlying concept. ...