QM214 - Test 2

Variance

Average of the squared differences between the observation and mean.

Sample Space

Denoted by S, contains all possible outcomes of an experiment.

Correlation Coefficient

Describes both the direction and the strength of the linear relationship between X and Y

Mutually Exclusive

Events are ___________________ __________________________ if they do not share any common outcome of an experiment.

Exhaustive

Events are ______________________ if all possible outcomes of an experiment belong to the events.

Exhaustive

Includes all outcomes in the sample space.

MAD

Mean Absolute Deviation. Average of the absolute differences between the observations and the mean.

Z-Score

Measures the relative location of the sample value, X.

Probability

Numerical value that measures likelihood. Value between 0 and 1, where a value of 0 indicates impossible events and a value of 1 indicates definite events.

Covariance

Objective numerical value that reveals the direction of the linear relationship between two variables.

Mutually Exclusive Events

Occurrence of one event precludes the occurrence of the other.

Conditional Probability

Probability of an event is conditional on the occurrence of another event.

Empirical Rule

Provides approximate percentage of observations that fall within 1, 2, or 3 standard deviations of the mean.

Coefficient of Variation

Relative measure of dispersion and adjusts for differences in the magnitudes of means. Calculated by dividing a set's standard deviation by its mean.

Event

Subset of sample space.

Independent

Two events are ________________________ if the occurrence of one event does not change the probability of the occurrence of the other event.

Dependent

Two events are __________________________ if the occurrence of one is related to the probability of the occurrence of the other.