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Session Presentation Inferential Statistics Foundations

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Session Presentation Inferential Statistics Foundations

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Inferential Statistics

Foundations
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Agenda

● Probability
● Random Variable
● Distributions around us
● Binomial Distribution
● Normal Distribution
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Pop Quiz

1. What do you understand by binomial distribution?


2. What are the assumptions of binomial?
3. What is the importance of normal distribution?

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Probability
● Probability refers to chance or likelihood of a particular event taking place.

● An event is an outcome of an experiment.

● An experiment is a process that is performed to understand and observe possible outcomes.


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● Set of all
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Probability : Example

A company is conducting a telephone survey of Response Number of times


randomly selected individuals to get their overall
Positive 201
impressions of the year 2020. So far, 1646 people
have been surveyed. The frequency distribution shows Negative 903
the results. What is the probability that the next
Neither 235
person surveyed has a positive overall impression of
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2020? Don’t know 307
Sum 1646

P(response is positive) = #Positive Responses / #Total Responses

P(response is positive) = 201/1646 ≈ 0.12


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Random Variable
Suppose there are 1000 students in the university. What is the probability that 500 students will
pass the upcoming exam?

here is a 50-50 chance that each student will pass or fail

The total number of students who pass can range from 0 to 1000
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A random variable assigns a numerical value to each outcome of an experiment. It assumes
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different values with different probability.

There are two types of Random variables:

1) Discrete random variable: It can take finite number of values. For example: Number of
employees getting promoted in an organization

2) Continuous random variable: It can take infinite number of values in a given range. For
example: Speed of an aircraft.
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Distributions around us (commonly occuring)

Bernoulli The outcome of tossing a fair coin

Binomial
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The number of non-defective products in a production run.
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Normal IQ distribution of all the seven years old children in the New York

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Binomial Distribution
The binomial distribution is the probability distribution of a success or failure outcome of an
experiment that is conducted multiple times. Ex. Probability of getting a head after tossing a coin
10 times

The assumptions of Binomial distributions are as follows:

1. There areonly two possible outcomes (success or failure) for each trial.
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2. The number of observations or trials is fixed.
3. Each observation or trial is independent. In other words, none of your trials have an effect on
the probability of the next trial.
4. The probability of success (tail or head) is exactly the same from one trial to another.

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Normal Distribution
The normal distribution is the probability distribution that is symmetric about the mean. It is also
known as bell curve.

Properties:

● It is a continuous probability distribution


● It has a zero skewness
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● Mean = Median = Mode
● In a standard normal distribution,
the mean is zero and the standard deviation is 1

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Normal distribution
Cumulative distribution function (cdf): It is the area under the curve for the given value.

Ex. What is the chance that a man is less than 165 cm tall?

Percent point function (ppf): It is the inverse of the cdf value.

Ex. Given thatI am looking for a man who is smaller than 95% of all other men, what size does the
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subject have to be?

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Normal Distribution in Python
The mean weight of a morning breakfast cereal pack is 0.295 kg with a standard deviation of 0.025
kg. The random variable - weight of the pack follows a normal distribution.

1. What is the probability that the pack weighs less than 0.280 kg? - cdf?
2. Given that I am looking for a pack which weighs higher than at least 90% of the other packs,
what is the weight value? - ppf?
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Solution:

Probability = Probability = 0.9


0.274 i.e. 27.4%
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Weight value
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Happy Learning !
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