One thousand tickets are sold for 50 pesos each. One ticket will win 10,000 pesos. Two tickets will win 5,000 pesos. Three tickets will win 1,000. Let X denote the net gain from the purchase of a randomly selected ticket. a.What is the probability that you will win a prize if you will buy two tickets? b. Construct probability distribution of X c.What is the mean expected value of a person who buys a ticket?
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
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