In This Chapter
Working with probability
Dealing with random variables and their distributions
Focusing on the binomial distribution
Throughout this book, I toss around the concept of probability, because itâs the basis of hypothesis testing and inferential statistics. Most of the time, I represent probability as the proportion of area under part of a distribution. For example, the probability of a Type I error (Î±) is the area in a tail of the standard normal distribution or the t distribution.
In this chapter, I explore probability in greater detail, including random variables, permutations, and combinations. I examine probabilityâs fundamentals and applications, and then zero in on a couple of specific probability distributions, and I discuss probability-related Excel worksheet functions.
What Is Probability?
Most of us have an intuitive idea about what probability is all about. Toss a fair coin, and you have a 50-50 chance it comes up âHeads.â Toss a fair die (one of a pair of dice) and you have a one-in-six chance ...