Business Statistics

PROBABILITY
DISTRIBUTIONS

Prof. Rajnish Mishra

Ph.D, MCA, MBA-Business Analytics, M.Sc-Maths, M.Sc-Stats, M.Sc-Yogic Science, M.A.-Hindi
Diploma in Programming-IITM | Diploma in Data Science-IITM | Diploma in Software Testing
Members: CSI, CSTA
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3. SOME IMPORTANT
THEORETICAL DISTRIBUTIONS

3.1 BINOMIAL DISTRIBUTION

3.1.0 Introduction:
In this chapter we will discuss the theoretical discrete
distributions in which variables are distributed according to some
definite probability law, which can be expressed mathematically.
The Binomial distribution is a discrete distribution expressing the
probability of a set of dichotomous alternative i.e., success or
failure. This distribution has been used to describe a wide variety of
process in business and social sciences as well as other areas.
3.1.1 Bernoulli Distribution:
A random variable X which takes two values 0 and 1 with
probabilities q and p i.e., P(x=1) = p and P(x=0) = q, q = 1−p, is
called a Bernoulli variate and is said to be a Bernoulli Distribution,
where p and q takes the probabilities for success and failure
respectively. It is discovered by Swiss Mathematician James
Bernoulli (1654-1705).
Examples of Bernoulli’ s Trails are:
1) Toss of a coin (head or tail)
2) Throw of a die (even or odd number)
3) Performance of a student in an examination (pass or fail)
3.1.2 Binomial Distribution:
A random variable X is said to follow binomial distribution,
if its probability mass function is given by

P (X = x) = P(x) = nCx px qn-x ; x = 0, 1,2, …,n

0 ; otherwise
Here, the two independent constants n and p are known as the
‘ parameters’ of the distribution. The distribution is completely
determined if n and p are known. x refers the number of successes.
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If we consider N sets of n independent trials, then the number of
times we get x success is N(nCx px qn-x). It follows that the terms in
the expansion of N (q + p)n gives the frequencies of the occurrences
of 0,1,2,...,x,...,n success in the N sets of independent trials.
3.1.3 Condition for Binomial Distribution:
We get the Binomial distribution under the following
experimental conditions.
1) The number of trials ‘ n’ is finite.
2) The trials are independent of each other.
3) The probability of success ‘ p’ is constant for each trial.
4) Each trial must result in a success or a failure.
The problems relating to tossing of coins or throwing of
dice or drawing cards from a pack of cards with replacement lead to
binomial probability distribution.
3.1.4 Characteristics of Binomial Distribution:
1. Binomial distribution is a discrete distribution in which the
random variable X (the number of success) assumes the
values 0,1, 2, ….n, where n is finite.
2. Mean = np, variance = npq and
standard deviation σ = npq ,
q− p
Coefficient of skewness = ,
npq
1 - 6pq
Coefficient of kurtosis = , clearly each of the
npq
probabilities is non-negative and sum of all probabilities is
1 ( p < 1 , q < 1 and p + q =1, q = 1− p ).
3. The mode of the binomial distribution is that value of the
variable which occurs with the largest probability. It may
have either one or two modes.
4. If two independent random variables X and Y follow
binomial distribution with parameter (n1, p) and (n2, p)
respectively, then their sum (X+Y) also follows Binomial
distribution with parameter (n1 + n2, p)
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5. If n independent trials are repeated N times, N sets of n
trials are obtained and the expected frequency of x success
is N(nCx px qn-x). The expected frequencies of 0,1,2… n
success are the successive terms of the binomial distribution
of N(q + p)n.
Example 1:
Comment on the following: “ The mean of a binomial
distribution is 5 and its variance is 9”
Solution:
The parameters of the binomial distribution are n and p
We have mean ⇒ np = 5
Variance ⇒ npq = 9
npq 9
∴q= =
np 5
9
q = >1
5
Which is not admissible since q cannot exceed unity. Hence
the given statement is wrong.
Example 2:
Eight coins are tossed simultaneously. Find the probability
of getting atleast six heads.
Solution:
Here number of trials, n = 8, p denotes the probability of
getting a head.
1 1
∴p= and q =
2 2
If the random variable X denotes the number of heads, then
the probability of a success in n trials is given by
P(X = x) = ncx px qn-x , x = 0 , 1, 2, ..., n
x 8− x 8
1 1 1
= 8Cx     = 8Cx  
 2  2  2
1
= 8 8Cx
2
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Probability of getting atleast six heads is given by
P(x ≥ 6) = P(x = 6) + P(x = 7) + P(x = 8)
1 1 1
= 8 8C6 + 8 8C7 + 8 8C8
2 2 2
1
= 8 [ 8C6 + 8C7 + 8C8]
2
1 37
= 8 [ 28 +8 +1] =
2 256
Example 3:
Ten coins are tossed simultaneously. Find the probability
of getting (i) atleast seven heads (ii) exactly seven heads
(iii) atmost seven heads
Solution:
1
p = Probability of getting a head =
2
1
q = Probability of not getting a head =
2
The probability of getting x heads throwing 10 coins
simultaneously is given by
P(X = x) = nCx px qn-x. , x = 0 , 1, 2 , ..., n
x 10 − x
1 1 1
= 10Cx     = 10Cx
 2  2 210
i) Probability of getting atleast seven heads
P(x ≥ 7) = P (x = 7) + P(x = 8) + P (x = 9) + P (x =10)
1
= 10 [ 10C7 + 10C8 + 10C9+ 10C10]
2
1 176
= [ 120 + 45 + 10 +1] =
1024 1024
ii) Probability of getting exactly 7 heads
1 1
P ( x = 7) = 10 10C7 = 10 (120)
2 2
120
=
1024
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iii) Probability of getting atmost 7 heads
P( x ≤ 7) = 1 – P(x > 7)
= 1 − { P(x = 8) + P (x = 9) + P(x = 10)}
1
= 1− 10 {10C8 + 10C9 + 10C10}
2
1
= 1 − 10 [45 +10+1]
2
56
=1−
1024
968
=
1024
Example 4:
20 wrist watches in a box of 100 are defective. If 10
watches are selected at random, find the probability that (i) 10 are
defective (ii) 10 are good (iii) at least one watch is defective
(iv) at most 3 are defective.
Solution:
20 out of 100 wrist watches are defective
20 1
Probability of defective wrist watch , p = =
100 5
4
∴ q = 1− p =
5
Since 10 watches are selected at random, n =10
P(X = x) = nCx px qn-x , x = 0 , 1, 2, ...,10
x 10 − x
1  4
= 10Cx    
 5  5
i) Probability of selecting 10 defective watches
10 0
1  4
P( x =10) = 10C10    
5  5
1 1
= 1. .1 = 10
510 5

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ii) Probability of selecting 10 good watches (i.e. no defective)
0 10
1  4
P(x = 0) = 10C0    
5  5
10 10
 4  4
= 1.1.   =  
 5  5
iii) Probability of selecting at least one defective watch
P(x ≥ 1) = 1 – P(x < 1)
= 1 – P(x = 0)
0 10
1  4
= 1 − 10C0    
5  5
10
 4
=1−  
 5
iv) Probability of selecting at most 3 defective watches
P (x ≤ 3) = P (x = 0) + P(x =1) + P(x = 2) + P(x = 3)
0 10 1 9 2 8
1  4 1  4 1  4
= 10C0     +10C1     + 10C2    
5  5 5  5  5  5
3 7
1  4
+10C3    
5  5
10 1 9 2 8
 4 1  4 10.9  1   4 
= 1.1.   + 10     +    
 5 5  5 1.2  5   5 
3 7
10.9.8 1  4
+    
1.2.3 5  5
= 1. (0.107) + 10 (0.026) + 45 (0.0062) + 120 (0.0016)
= 0.859 (approx)
Example 5:
With the usual notation find p for binomial random variable
X if n = 6 and 9P(X = 4) = P(X = 2)
Solution:
The probability mass function of binomial random variable X is
given by
P(X = x) = nCx px qn-x. , x = 0 , 1, 2, ...,n
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Here n = 6 ∴ P(X = x) = 6Cx p q x 6-x

P (x = 4) = 6C4 p4 q2
P (x = 2) = 6C2 p2 q4
Given that,
9. P(x = 4) = P(x = 2)
9. 6C4 p4q2 = 6C2 p2q4
⇒ 9 × 15p2 = 15q2
9p2 = q2
Taking positive square root on both sides we get,
3p = q
= 1− p
4p = 1
1
∴p= = 0.25
4
3.1.5 Fitting of Binomial Distribution:
When a binomial distribution is to be fitted to an observed
data, the following procedure is adopted.
Σfx
1. Find Mean = x = = np
Σf
x
⇒p= where n is number of trials
n
2. Determine the value, q = 1− p.
3. The probability function is P(x) = nCx px qn-x put x = 0, we
set P(0) = qn and f(0) = N × P(0)
4. The other expected frequencies are obtained by using the
recurrence formula is given by
n-x p
f(x+1) = f(x)
x+1 q
Example 6:
A set of three similar coins are tossed 100 times with the
following results
Number of heads : 0 1 2 3
Frequency : 36 40 22 2

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Solution:
X f fx
0 36 0
1 40 40
2 22 44
3 2 6
Σf =100 Σfx = 90
Σfx 90
Mean = x = = = 0.9
Σf 100
x
p=
n
0.9
= = 0.3
3
q = 1 –0.3
= 0.7
The probability function is P(x) = nCx px qn-x
Here n = 3, p = 0.3 q = 0.7
∴P(x) = 3Cx (0.3)x (0.7)3-x
P(0) = 3C0 (0.3)0 (0.7)3
= (0.7)3 = 0.343
∴ f(0) = N × P(0) = 0.343 × 100 = 34.3
The other frequencies are obtained by using the recurrence formula
n-x  p 
x+1  q 
f(x+1) = f(x). By putting x = 0, 1, 2 the expected

frequencies are calculated as follows.

3-0  p 
× 34.3
0 + 1  q 
f(1) =

= 3 × (0.43) × 34.3 = 44.247

3 -1  p 
1 + 1  q 
f(2) = f(1)

2
= (0.43) × 44.247
2
= 19.03
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3− 2  p 
2 + 1  q 
f(3) = f(2)

1
= (0.43) × 19.03
3
= 2.727
The observed and theoretical (expected) frequencies are tabulated
below:
Total
Observed 36 40 22 2 100
frequencies
Expected 34 44 19 3 100
frequencies
Example 7:
4 coins are tossed and number of heads noted. The
experiment is repeated 200 times and the following distribution is
obtained .
x: Number of heads 0 1 2 3 4
f: frequencies 62 85 40 11 2

Solution:
X 0 1 2 3 4 Total
f 62 85 40 11 2 200
fx 0 85 80 33 8 206

Σfx 206
Mean = x = = = 1.03
Σf 200
x 1.03
p= = = 0.2575
n 4
∴ q = 1− 0.2575 = 0.7425
Here n = 4 , p = 0.2575 ; q = 0.7425
The probability function of binomial distribution is
P(x) = nCx px qn-x

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The binomial probability function is
P(x) = 4Cx (0.2575)x (0.7425)4-x
P(0) = (0.7425)4
= 0.3039
∴ f(0) = NP(0)
= 200 × 0.3039
= 60.78
The other frequencies are calculated using the recurrence formula
n-x  p 
x+1  q 
f(x+1) = f(x). By putting x = 0,1, 2, 3 then the expected

frequencies are calculated as follows:

Put x = 0, we get
4-0
f(1) = (0.3468) (60.78)
0 +1
= 84.3140
4 -1
f(2) = (0.3468) (84.3140)
1+1
= 43.8601
4-2
f(3) = (0.3468) (43.8601)
2 +1
= 10.1394
4-3
f(4) = (0.3468) (10.1394)
3 +1
= 0.8791

The theoretical and expected frequencies are tabulated below:

Total
Observed 62 85 40 11 2 200
frequencies
Expected 61 84 44 10 1 200
frequencies

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3.2 POISSON DISTRIBUTION:

3.2.0 Introduction:
Poisson distribution was discovered by a French
Mathematician-cum-Physicist Simeon Denis Poisson in 1837.
Poisson distribution is also a discrete distribution. He derived it as a
limiting case of Binomial distribution. For n-trials the binomial
distribution is (q + p)n ; the probability of x successes is given by
P(X=x) = nCx px qn-x . If the number of trials n is very large and the
probability of success ‘ p’ is very small so that the product np = m is
non – negative and finite.
The probability of x success is given by
e−m m x
P( X = x ) = for x = 0,1,2, …
x!
0 ; otherwise
Here m is known as parameter of the distribution so that m >0
Since number of trials is very large and the probability of
success p is very small, it is clear that the event is a rare event.
Therefore Poisson distribution relates to rare events.
Note:
1 1 1
1) e is given by e = 1 + + + +….. = 2.71828
1! 2! 3!
e− m m 0
2) P(X=0) = , 0! = 1 and 1! = 1
0!
e− m m1
3) P(X=1) =
1!
Some examples of Poisson variates are :
1. The number of blinds born in a town in a particular year.
2. Number of mistakes committed in a typed page.
3. The number of students scoring very high marks in all
subjects
4. The number of plane accidents in a particular week.
5. The number of defective screws in a box of 100,
manufactured by a reputed company.
6. Number of suicides reported in a particular day.

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3.2.1 Conditions:
Poisson distribution is the limiting case of binomial
distribution under the following conditions:
1. The number of trials n is indefinitely large i.e., n à ∞
2. The probability of success ‘ p’ for each trial is very small;
i.e., p à 0
3. np = m (say) is finite , m > 0

3.2.2 Characteristics of Poisson Distribution:

The following are the characteristics of Poisson distribution
1. Discrete distribution: Poisson distribution is a discrete
distribution like Binomial distribution, where the random
variable assume as a countably infinite number of values
0,1,2 ….
2. The values of p and q: It is applied in situation where the
probability of success p of an event is very small and that of
failure q is very high almost equal to 1 and n is very large.
3. The parameter: The parameter of the Poisson distribution is
m. If the value of m is known, all the probabilities of the
Poisson distribution can be ascertained.
4. Values of Constant: Mean = m = variance; so that standard
deviation = m
Poisson distribution may have either one or two modes.
5. Additive Property: If X and Y are two independent Poisson
distribution with parameter m1 and m2 respectively. Then
(X+Y) also follows the Poisson distribution with parameter
(m1 + m2)
6. As an approximation to binomial distribution: Poisson
distribution can be taken as a limiting form of Binomial
distribution when n is large and p is very small in such a
way that product np = m remains constant.
7. Assumptions: The Poisson distribution is based on the
following assumptions.
i) The occurrence or non- occurrence of an event does
not influence the occurrence or non-occurrence of
any other event.
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ii) The probability of success for a short time interval
or a small region of space is proportional to the
length of the time interval or space as the case may
be.
iii) The probability of the happening of more than one
event is a very small interval is negligible.
Example 8:
Suppose on an average 1 house in 1000 in a certain district
has a fire during a year. If there are 2000 houses in that district,
what is the probability that exactly 5 houses will have a fire during
the year? [given that e-2 = 0.13534]
1
Mean, x = np , n = 2000 and p =
1000
1
= 2000 ×
1000
m=2
The Poisson distribution is
e−m m x
P(X=x) =
x!
−2 5
e 2
∴P(X =5) =
5!
(0.13534) × 32
=
120
= 0.036
(Note: The values of e-m are given in Appendix )
Example 9:
In a Poisson distribution 3P(X=2) = P(X=4) Find the
parameter ‘ m’ .
Solution:
e−m m x
Poisson distribution is given by P(X=x) =
x!
Given that 3P(x=2) = P(x= 4)

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−m 2 −m 4
m e e m
3. =
2! 4!
3 × 4!
m2 =
2!
∴ m= ±6
Since mean is always positive ∴ m = 6

Example 10:
If 2% of electric bulbs manufactured by a certain company
are defective. Find the probability that in a sample of 200 bulbs
i) less than 2 bulbs ii) more than 3 bulbs are defective.[e-4 = 0.0183]
Solution:
2
The probability of a defective bulb = p = = 0.02
100
Given that n = 200 since p is small and n is large
We use the Poisson distribution
mean, m = np = 200 × 0.02 = 4
e−m m x
Now, Poisson Probability function, P(X = x) =
x!
i) Probability of less than 2 bulbs are defective
= P(X<2)
= P(x = 0) + P(x = 1)
e−4 40 e−4 41
= +
0! 1!
-4 -4
= e + e (4)
= e- 4 (1 + 4) = 0.0183 × 5
= 0.0915
ii) Probability of getting more than 3 defective bulbs
P(x > 3) = 1− P(x ≤ 3)
= 1− {P(x = 0) + P(x =1) + P(x=2) + P(x=3)}
-4 4 2 43
= 1− e {1+ 4+ + }
2! 3!
= 1− {0.0183 × (1 + 4 + 8 + 10.67)}
= 0.567
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3.2.3 Fitting of Poisson Distribution:
The process of fitting of Poisson distribution for the
probabilities of x = 0, 1,2,... success are given below :
∑ fx
i) First we have to calculate the mean = x = =m
∑f
ii) The value of e-m is obtained from the table (see Appendix )
e − m .m x
iii) By using the formula P(X=x) =
x!
Substituting x = 0, P(0) = e-m
Then f(0) = N×P(0)
The other expected frequencies will be obtained by using the
recurrence formula
m
f(x+1) = f(x) ; x = 0,1,2, …
x +1

Example 11:
The following mistakes per page were observed in a book.
Number of mistakes ( per page) 0 1 2 3 4
Number of pages 211 90 19 5 0
Fit a Poisson distribution to the above data.

Solution:
xi fi fixi
0 211 0
1 90 90
2 19 38
3 5 15
4 0 0
N = 325 fx = 143

fx
Mean = x =
N
143
= = 0 .44 = m
325
Then e-m ⇒ e- 0.44 = 0.6440
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Probability mass function of Poisson distribution is

mx
P(x) = e-m
x!
0
-0.44 44
Put x = 0, P(0) = e
0!
= e-0.44
= 0.6440
∴ f(0) = N P(0)
= 325 × 0.6440
= 209.43
The other expected frequencies will be obtained by using the
recurrence formula
m
f(x+1) = f(x). By putting x = 0,1,2,3 we get the
x +1
expected frequencies and are calculated as follows.
f(1) = 0.44 × 209.43 = 92.15
0.44
f(2) = × 92.15 = 20.27
2
0.44
f(3) = × 20.27 = 2.97
3
0.44
f(4) = × 2.97 = 0.33
4
Total
Observed 211 90 19 5 0 325
frequencies
Expected 210 92 20 3 0 325
frequencies
Example 12:
Find mean and variance to the following data which gives the
frequency of the number of deaths due to horse kick in 10 corps per
army per annum over twenty years.
X 0 1 2 3 4 Total
F 109 65 22 3 1 200
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Solution:
Let us calculate the mean and variance of the given data
xi fi fixi fixi2
0 109 0 0
1 65 65 65
2 22 44 88
3 3 9 27
4 1 4 16
Total N = 200 fx = 122 fx2 = 196

i fix
Mean = x =
N
122
=
200
= 0.61

f i2x
( )
2
Variance = σ2 = i
− x
N
196
= − (0.61)2
200
= 0.61
Hence, mean = variance = 0.61

Example 13:

100 car radios are inspected as they come off the production
line and number of defects per set is recorded below

No. of 0 1 2 3 4
defects
No. of 79 18 2 1 0
sets

Fit a Poisson distribution and find expected frequencies

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Solution:
x f fx
0 79 0
1 18 18
2 2 4
3 1 3
4 0 0
N = 100 fx = 25
fx
Mean = x =
N
25
=
100
∴m = 0.25
Then e-m = e- 0.25 = 0.7788 = 0.779
Poisson probability function is given by
e− m m x
P(x) =
x!
−0.25
e (0.25)0
P(0) = = (0.779)
0!
∴ f(0) = N.P(0) = 100 × (0.779) = 77.9
Other frequencies are calculated using the recurrence formula
m
f(x+1) = f(x).
x +1
By putting x = 0,1,2,3, we get the expected frequencies and are
calculated as follows.
m
f(1) = f(0+1) = f(0)
0+1
0.25
f(1) = (77.9)
1
= 19.46
0.25
f(2) = (19.46)
2
= 2.43
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0.25
f(3) = (2.43)
3
= 0.203
0.25
f(4) = (0.203)
4
= 0.013
Observed 79 18 2 1 0 100
frequencies
Expected 78 20 2 0 0 100
frequencies

Example 14:
Assuming that one in 80 births in a case of twins, calculate
the probability of 2 or more sets of twins on a day when 30 births
occurs. Compare the results obtained by using (i) the binomial and
(ii) Poisson distribution.
Solution:
(i) Using Binomial distribution
1
Probability of twins birth = p = = 0.0125
80
∴ q = 1− p = 1 – 0.0125
= 0.9875
n = 30
Binomial distribution is given by
P(x) = nCx px qn-x
P(x ≥ 2) = 1 – P(x < 2)
= 1 – {P(x = 0) + P(x =1)}
= 1 – {30C0(0.0125)0 (0.9875)30
+ 30C1 (0.0125)1(0.9875)29}
= 1– {1.1(0.9875)30 + 3 (0.125) (0.9875)29}
= 1 – { 0.6839 + 0.2597}
= 1 – 0.9436
P( x ≥ 2) = 0.0564
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(ii) By using Poisson distribution:
The probability mass function of Poisson distribution is given by
e− m m x
P(x) =
x!
Mean = m = np
= 30 (0.0125) = 0.375
P(x ≥2) = 1− P(x <2)
= 1 − { P( x = 0) + P( x = 1)}
e −0.375 (0.375)0 e −0.375 (0.375)1
=1–{ + }
0! 1!
= 1 − e- 0.375 ( 1 + 0.375)
= 1 – (0.6873) (1.375) = 1 – 0.945 = 0.055
3.3 NORMAL DISTRIBUTION:
3.3.0 Introduction:
In the preceding sections we have discussed the discrete
distributions, the Binomial and Poisson distribution.
In this section we deal with the most important continuous
distribution, known as normal probability distribution or simply
normal distribution. It is important for the reason that it plays a
vital role in the theoretical and applied statistics.
The normal distribution was first discovered by DeMoivre
(English Mathematician) in 1733 as limiting case of binomial
distribution. Later it was applied in natural and social science by
Laplace (French Mathematician) in 1777. The normal distribution
is also known as Gaussian distribution in honour of Karl Friedrich
Gauss(1809).
3.3.1 Definition:
A continuous random variable X is said to follow normal
distribution with mean µ and standard deviation σ, if its
probability density function
1  x −µ  2
−  
f(x) =
1
e 2  σ  ;−∞ < x < ∞ , − ∞ < µ < ∞, σ > 0.
σ π2
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Note:
The mean µ and standard deviation σ are called the
parameters of Normal distribution. The normal distribution is
expressed by X ∼ N(µ, σ2)
3.3.2 Condition of Normal Distribution:
i) Normal distribution is a limiting form of the binomial
distribution under the following conditions.
a) n, the number of trials is indefinitely large ie., nà ∞ and
b) Neither p nor q is very small.
ii) Normal distribution can also be obtained as a limiting form of
Poisson distribution with parameter m à ∞
iii) Constants of normal distribution are mean = µ, variation =σ2,
Standard deviation = σ.

3.3.3 Normal probability curve:

The curve representing the normal distribution is called the
normal probability curve. The curve is symmetrical about the mean
(µ), bell-shaped and the two tails on the right and left sides of the
mean extends to the infinity. The shape of the curve is shown in the
following figure.

-∞ x=µ ∞

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3.3.4 Properties of normal distribution:
1. The normal curve is bell shaped and is symmetric at x = µ.
2. Mean, median, and mode of the distribution are coincide
i.e., Mean = Median = Mode = µ
3. It has only one mode at x = µ (i.e., unimodal)
4. Since the curve is symmetrical, Skewness = β1 = 0 and
Kurtosis = β2 = 3.
5. The points of inflection are at x = µ ± σ
6. The maximum ordinate occurs at x = µ and
1
its value is =
σ 2π
7. The x axis is an asymptote to the curve (i.e. the curve
continues to approach but never touches the x axis)
8. The first and third quartiles are equidistant from median.
9. The mean deviation about mean is 0.8 σ
10. Quartile deviation = 0.6745 σ
11. If X and Y are independent normal variates with mean µ1
and µ2, and variance σ12 and σ22 respectively then their sum
(X + Y) is also a normal variate with mean (µ1 + µ2) and
variance (σ12 + σ22)
12. Area Property P(µ - σ < × < µ + σ) = 0.6826
P(µ - 2σ < × < µ + 2σ) = 0.9544
P(µ - 3σ < × < µ + 3σ) = 0.9973
3.3.5 Standard Normal distribution:
Let X be random variable which follows normal distribution
with mean µ and variance σ2 .The standard normal variate is
X−µ
defined as Z = which follows standard normal distribution
σ
with mean 0 and standard deviation 1 i.e., Z ∼ N(0,1). The standard
−1 2
1 Z
normal distribution is given by φ(z) = e ; -∞ < z< ∞ 2

2π
The advantage of the above function is that it doesn’ t contain any
parameter. This enable us to compute the area under the normal
probability curve.
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3.3.6 Area properties of Normal curve:
The total area under the normal probability curve is 1. The
curve is also called standard probability curve. The area under the
curve between the ordinates at x = a and x = b where a < b,
represents the probabilities that x lies between x = a and x = b i.e.,
P(a ≤ x ≤ b)

-∞ x = µ x=a x=b +∞
To find any probability value of x, we first standardize it by
X−µ
using Z = , and use the area probability normal table. (given
σ
in the Appendix).
For Example: The probability that the normal random variable x to
lie in the interval (µ−σ , µ+σ) is given by

-∞ x=µ−σ x=µ x=µ+σ +∞

z = -1 z=0 z=+1

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P( µ − σ < x < µ+σ) = P(−1 ≤ z ≤ 1 )

= 2P(0 < z < 1)
= 2 (0.3413) (from the area table)
= 0.6826
P( µ - 2σ < x < µ+2σ) = P(-2 < z < 2 )
= 2P(0 < z < 2)
= 2 (0.4772) = 0.9544

-∞ x=µ−2σ x=µ x=µ+2σ + ∞

z = -2 z=0 z = +2

P(µ − 3σ < x < µ + 3σ) = P(−3 < z < 3 )

= 2P(0 < z < 3)
= 2 (0.49865) = 0.9973

-∞ x=µ−3σ x=µ x=µ+3σ +∞

z = -3 z =0 z=+3

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The probability that a normal variate x lies outside the range µ ± 3σ

is given by
P(|x −µ | > 3σ) = P(|z| >3)
= 1 – P(−3 ≤ z ≤ 3)
= 1 − 0.9773 = 0.0027
Thus we expect that the values in a normal probability curve will
lie between the range µ ± 3σ, though theoretically it range
from − ∞ to ∞.
Example 15:
Find the probability that the standard normal variate lies
between 0 and 1.56
Solution:

0.4406

-∞ z =0 z = 1.56 +∞
P(0<z<1.56) = Area between z = 0 and z = 1.56
= 0.4406 (from table)
Example 16:
Find the area of the standard normal variate from –1.96 to 0.
Solution:

0.4750

-∞ z = -1.96 z=0 +∞
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Area between z = 0 & z =1.96 is same as the area z = −1.96 to z = 0

P(-1.96 < z < 0) = P(0 < z < 1.96) (by symmetry)
= 0.4750 (from the table)
Example 17:
Find the area to the right of z = 0.25
Solution:

0.4013

-∞ z = 0 z = 0.25 +∞

P(z >0.25) = P(0<z < ∞) – P(0<z<0.25)

= 0.5000 - 0.0987 (from the table) = 0.4013
Example 18:
Find the area to the left of z = 1.5
Solution:

0.9332

-∞ z=0 z = 1.5 +∞

P(z < 1.5) = P( − ∞ < z < 0 ) + P( 0 < z < 1.5 )

= 0.5 + 0.4332 (from the table)
= 0.9332
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Example 19:
Find the area of the standard normal variate between –1.96 and 1.5
Solution:

0.9082

-∞ z= -1.96 z=0 z=1.5 +∞

P(-1.96 < z < 1.5) = P(-1.96 < z < 0) + P(0 < z < 1.5)
= P(0 < z < 1.96) + P(0 < z < 1.5)
= 0.4750 + 0.4332 (from the table)
= 0.9082
Example 20:
Given a normal distribution with µ = 50 and σ = 8, find the
probability that x assumes a value between 42 and 64
Solution:

0.8012

-∞ z= -1 z=0 z=1.75 +∞

Given that µ = 50 and σ = 8

x−µ
The standard normal variate z =
σ

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42 − 50 − 8
If X = 42 , Z1 = = = −1
8 8
64 − 50 14
If X = 64, Z2 = = = 1.75
8 8
∴ P(42 < x < 64) = P(−1 < z <1.75)
= P(−1< z < 0) + P(0 < z <1.95)
= P(0<z<1) + P (0 < z <1.75) (by symmetry)
= 0.3413 +0 .4599 (from the table)
= 0 .8012
Example 21:
Students of a class were given an aptitude test. Their marks
were found to be normally distributed with mean 60 and standard
deviation 5. What percentage of students scored.
i) More than 60 marks (ii) Less than 56 marks
(iii) Between 45 and 65 marks
Solution:
Given that mean = µ = 60 and standard deviation = σ = 5
x−µ
i) The standard normal varaiate Z =
σ

0.5

-∞ z=0 z>0 +∞

x−µ 60 − 60
If X = 60, Z = = =0
σ 5
∴P(x > 60) = P(z > 0)
= P(0 < z < ∞ ) = 0.5000
Hence the percentage of students scored more than 60
marks is 0.5000(100) = 50 %
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56 − 60 − 4
ii) If X = 56, Z = = = − 0.8
5 5

0.2119

-∞ z= -0.8 z=0 +∞
P(x < 56) = P(z < −0.8)
= P(- ∞ < z < 0) – P(−0.8 < z < 0) (by symmetry)
= P(0 < 2 < ∞) – P(0 < z < 0.8)
= 0.5 − 0.2881 (from the table)
= 0.2119
Hence the percentage of students score less than 56 marks is
0.2119(100) = 21.19 %
45 − 60 − 15
iii) If X = 45, then z = = = −3
5 5

0.83995

-∞ z= -3 z=0 z=1 +∞

65 − 60 5
X = 65 then z = = =1
5 5
P(45 < x < 65) = P(−3 < z < 1)
= P(−3 < z < 0 ) + P ( 0 < z < 1)

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= P(0 < z < 3) + P(0 < z < 1) ( by symmetry)
= 0.4986 + 0.3413 (from the table)
= 0.8399
Hence the percentage of students scored between 45 and 65
marks is 0.8399(100) = 83.99 %
Example 22:
X is normal distribution with mean 2 and standard deviation
3. Find the value of the variable x such that the probability of the
interval from mean to that value is 0.4115
Solution:
Given µ = 2, σ = 3
Suppose z1 is required standard value,
Thus P (0 < z < z1) = 0.4115
From the table the value corresponding to the area 0.4115 is 1.35
that is z1 = 1.35
x−µ
Here z1 =
σ
x−2
1.35 =
3
x = 3(1.35) + 2
= 4.05 + 2 = 6.05
Example 23:
In a normal distribution 31 % of the items are under 45 and
8 % are over 64. Find the mean and variance of the distribution.
Solution:
Let x denotes the items are given and it follows the normal
distribution with mean µ and standard deviation σ
The points x = 45 and x = 64 are located as shown in the figure.
i) Since 31 % of items are under x = 45, position of x into
the left of the ordinate x = µ
ii) Since 8 % of items are above x = 64 , position of this x
is to the right of ordinate x = µ

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-∞ z = -z1 z=0 z = z2 +∞
x = 45 x = µ x = 64

x−µ 45 − µ
When x = 45, z = = = − z1 (say)
σ σ
Since x is left of x = µ , z1 is taken as negative
64 − µ
When x = 64, z = = z2 (say)
σ
From the diagram P(x < 45) = 0.31
P(z < - z1) = 0.31
P(- z1 < z < 0) = P(- ∞ < z < 0) – p(- ∞ < z < z1)
s = 0.5 - 0.31 = 0.19
P(0 < z < z1) = 0.19 (by symmetry)
z1 = 0.50 (from the table)
Also from the diagram p(x > 64) = 0.08
P(0 < z < z2) = P(0 < z < ∞) – P(z2 < z < ∞)
= 0.5 - 0.08 = 0.42
z2 = 1.40 (from the table)
Substituting the values of z1 and z2 we get
45 − µ 64 − µ
= − 0.50 and = 1.40
σ σ
Solving µ - 0.50 σ = 45 ----- (1)
µ + 1.40 σ = 64 ----- (2)
(2) – (1) ⇒ 1.90 σ = 19 ⇒ σ = 10
Substituting σ = 10 in (1) µ = 45 + 0.50 (10)
= 45 + 5.0 = 50.0
Hence mean = 50 and variance = σ2 = 100

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