Chapter 16

Introducing Probability

In This Chapter

Defining probability

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 it’s 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 (α) 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 probability’s 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 “Heads.” Toss a fair die (one of a pair of dice) and you have a one-in-six chance it comes ...

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