Chapter 4: Probability - Essential Statistics, Regression, and Econometrics [Book]

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CHAPTER 4

Probability

Chapter Outline

4.1 Describing Uncertainty

A Chimp Named Sarah

Long-Run Frequencies

A Scientific Study of Roulette

Experimental Coin Flips and Dice Rolls

Subjective Probabilities

Bayes’s Approach

4.2 Some Helpful Rules

The Addition Rule

Conditional Probabilities

Independent Events and Winning Streaks

The Fallacious Law of Averages

The Multiplication Rule

Legal Misinterpretations of the Multiplication Rule

The Subtraction Rule

A Bayesian Analysis of Drug Testing

4.3 Probability Distributions

Expected Value and Standard Deviation

The Normal Distribution

Probability Density Curves

Standardized Variables

The Central Limit Theorem

Finding Normal Probabilities

The Normal Probability Table

Nonstandardized ...

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