SBS 200 Exam 2

Which approach: there is a 5% chance that Sprint will merge with Verizon

Subjective

What is the central limit theorem?

1. Sample mean will always approach a population mean 2. The curve will approach a normal shape 3. Variability goes down

What is the Law of Large Numbers?

As the number of measurements increases, the data becomes more stable and a better approx of the true probability. Ex: As the number of observations increases or the number of times the experiment is performed, the estimate will become more accurate.

What is subjective probability?

Based on someone's personal judgement (often an expert) and often used when empirical and classic approaches are not available.

Which approach: a coin flip has a 50% chance of being "heads"

Classical

Which approach: there is a 2% chance of twins in a randomly chosen birth.

Empirical

What is the equation to find a raw score?

Mean + (Z score) (Standard Deviation)

What is classic probability?

Probabilities based on logic rather than data or experience, all options are equally likely; (number of outcomes of a specific event) / (number of all possible events)

What is empirical probability?

Relative frequency approach; (number of observed outcomes) / (number of observations)