Consider the following problem where we work for an oil company that looks for oil in geographic formations that are favorable to the formation of oil. Find the expected value for barrels of oil in problem A and then find the variance and standard deviation. For B, find the mean, variance, and standard deviation using formulas from chapter 3. For variance and standard deviation, use the population formulas. Compare A and B, and what do you observe? A Oil (barrel) Odds 2 25% 4 25% 4 25% 2 25% b. Oil values are 2,4,4,2
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
Consider the following problem where we work for an oil company that looks for oil in geographic formations that are favorable to the formation of oil. Find the
A
|
Oil (barrel) |
Odds |
|
2 |
25% |
|
4 |
25% |
|
4 |
25% |
|
2 |
25% |
b. Oil values are 2,4,4,2
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