Consider the following statements and discuss if they would be considered Classi
ID: 3258899 • Letter: C
Question
Consider the following statements and discuss if they would be considered Classical, Relative Frequency or Subjective and briefly explain why?
Obtaining 3 kings in poker with a 52 deck card
An insurance company estimates a male, 18 to 25, driving a red sports car will be in an accident within the next 2 months.
A company executive believes her company’s new phone will garner 25% of the market
The National Weather Service estimates a Category 4 storm will hit the east coast within the next 3 years
A bus company has 5 male drivers and 4 female drivers, “What is the probability 2 males will be randomly selected for drug screening?’
Ask a person to pick a number from 1 to 10. Question: What is the probability that a person will pick the number 7? Hint – Consider that there may be more than one solution.
The Bureau of the Census, Statistical Abstract of the United States reported that about 35% of American adults attended a sporting event the previous year
The CEO of Apple says there is an 80% chance that industry shipments will of smart phones will double in the next three years.
Explanation / Answer
Classic
If an experiment has n simple outcomes, this method would assign a probability of 1/n to each outcome. In other words, each outcome is assumed to have an equal probability of occurrence. This method is also called the axiomatic approach.
Relative-Frequency Approach.
Probabilities are assigned on the basis of experimentation or historical data. Formally, Let A be an event of interest, and assume that you have performed the same experiment n times so that n is the number of times A could have occurred. Further, let nA be the number of times that A did occur. Now, consider the relative frequency nA/n. Then, in this method, we “attempt” to define P(A) as:
P(A) = lim n nA /n .
In the subjective approach, we define probability as the degree of belief that we hold in the occurrence of an event. Thus, judgment is used as the basis for assigning probabilities. Notice that the classical approach of assigning equal probabilities to simple events is, in fact, also based on judgment.
Obtaining 3 kings in poker with a 52 deck card
Classic
An insurance company estimates a male, 18 to 25, driving a red sports car will be in an accident within the next 2 months.
Subjective
A company executive believes her company’s new phone will garner 25% of the market
Subjective
The National Weather Service estimates a Category 4 storm will hit the east coast within the next 3 years
Subjective
A bus company has 5 male drivers and 4 female drivers, “What is the probability 2 males will be randomly selected for drug screening?’
Classic
Ask a person to pick a number from 1 to 10. Question: What is the probability that a person will pick the number 7? Hint – Consider that there may be more than one solution.
Classic
The Bureau of the Census, Statistical Abstract of the United States reported that about 35% of American adults attended a sporting event the previous year
Relative Frequency
The CEO of Apple says there is an 80% chance that industry shipments will of smart phones will double in the next three years.
Subjective