1. As we learned in the reading, probabilities are defined as the area under the curve within a given interval. While the normal distribution is completely described by its mean and standard deviation, the standard normal distribution is one in which the mean is 0 and the standard deviation is 1. Why would we use these methods in business observations?
2. We are focusing on examples that encourage thinking about the consequences of the reversal of conditioning (diagnostic testing). What are some of the methods used to make these tests?
3. All discussions of statistical modeling rely upon random variables. In a business context, there are many applications of expected value and variance of random variables that are tractable. What are some examples used to identify returns on investment and demand forecasting that come to mind?