More on Probability
IN THIS CHAPTER
Understanding the beta version
Grappling with gamma
In Chapter 18, I delve into probability in a semiformal way, and introduce distributions of random variables. The binomial distribution is the starting point. In this chapter, I examine additional distributions.
One of the symbols on the pages of this book (and other books in the For Dummies series) lets you know that “technical stuff” follows. It might have been a good idea to hang that symbol above this chapter’s title. So here’s a small note of caution: Some mathematics follows. I put the math in to help you understand what you’re doing when you work with the dialog boxes of the Excel functions I describe.
Are these functions on the esoteric side? Well … yes. Will you ever have occasion to use them? Well … you just might.
The beta distribution (not to be confused with beta, the probability of a Type 2 error) is a sort of chameleon in the world of distributions. It takes on a wide variety of appearances, depending on the circumstances. I won’t give you all the mathematics behind the beta distribution, because the full treatment involves calculus.
The beta distribution connects with the binomial distribution, which I discuss in Chapter 18. The connection is this: In the binomial, the random variable x is the number of successes in N trials with p as the probability of a success. N and p are constants. In the beta distribution, ...