The Poisson Probability Distribution

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Presentation transcript:

The Poisson Probability Distribution The Poisson probability distribution provides a good model for the probability distribution of the number of “rare events” that occur randomly in time, distance, or space.

Example A life insurance company insures the lives of 5,000 men of age 42. If actuarial studies show the probability of any 42-year-old man dying in a given year to be 0.001, the probability that the company will have to pay 4 claims in a given year can be approximated by the Poisson distribution. P ( X = 4 \ n = 5000,  = 0.001 ) = 0.1745

Problem # 52