Vignette

Lynn Martin, the current President of the New York Stock Exchange

Binomial random variables are used in many applications. One place where they are used is in models of stock prices that allow investors to understand fair prices for complicated stock options. Pictured here is Lynn Martin, the president of the New York Stock Exchange at the time these notes were written in 2022.

Course Learning Objectives

This is an introductory course in statistical methods for business majors. The material you learn in this course will aid you in making decisions in business based on data and supports the Kelley School's I-CORE program.

CO1: Organize and summarize data by choosing appropriate descriptive statistics, tables, and graphs.

CO2: Calculate probabilities using random variables, probability distributions, and sampling distributions.

CO3: Make business decisions choosing appropriate hypothesis tests and forming appropriate interval estimates for problems.

CO4: Form and interpret simple linear regression models including the use of log transformations where appropriate.

CO5: Use Excel to summarize and analyze data for CO1, CO2, CO3, and CO4.

Module Learning Objectives

MO.W5.P2.1: Identify the characteristics of a binomial experiment.

MO.W5.P2.2: Calculate binomial probabilities using Excel.

MO.W5.P2.3: Calculate and interpret the mean and standard deviation of a binomial distribution.

MO.W5.P2.4: Use Excel for calculations from binomial distributions.

Learning Materials, Activities, and Assessments

The following pages contain text, reading assignments, and video lectures designed to teach the material for each objective. At the end of each page there are quick-check quizzes to make sure you understand some of the key terms and ideas for that page. You get two attempts at each quiz and 10 quizzes will be dropped from your quiz grade calculation. The quizzes are an important component of the course but are not meant to be unduly stressful.

After the lectures and quick-check quizzes, we will use two tools to solidify your understanding of the material: active learning worksheets to be completed with your peers in class and homework through the Pearson MyLab and Mastering system and/or through the Canvas quiz tool. Most homework problems will allow three attempts. If you are confused, sign up for any instructor/TA office hour on the Canvas Calendar for this course.

The outcomes in this module will be assessed in the subsequent Exams and Practice Exams for this course.