Statistics BTM8104 Week 3
Rudimentary probability theory is the primary focus of this section. Since many everyday situations are based on probabilistic reasoning and occurrences, it is important to have an understanding of probability theory and its connection to statistics. For example, choosing a life insurance policy is a decision that is influenced heavily by probability theory. Studying this fundamental statistical concept will not only support your scholarly academic goals, but will also help you to understand how probability influences decisions in your everyday life.
This section also examines the important statistical concept of the normal probability distribution. Many forms of data analysis utilize this concept, and many elements in our daily lives can be extrapolated from the normal probability distribution. In particular, the 68-95-99.7 percent rule, and the central limit theorem will be introduced, along with standard deviation and how it relates to the normal probability distribution.
Additional important concepts found in this section include: normal distribution and area covered, percentiles, standard scores, central limit theorem, understanding statistical significance, expressing and calculating basic probability, law of large numbers, and the gamblers fallacy.