STATISTICS AND

PROBABILITY
Quarter 3 – Module 3
Mean and Variance of a
Discrete Random Variable
 What I Need to Know
This module was designed and written with you in mind. It is here to indulge you on
computing the mean and variance of a discrete random variable. The scope of this
module permits it to be used in many different learning situations wherein will help
you analyze problems involving real-life situations. The arrangement of the lessons
follows the standard sequence of the course. But the pacing in which you read and
answer this module is dependent on your ability.

This module is aligned with the following most essential learning competencies:
1.calculate the mean and variance of a discrete random variable (M11/12SP-IIIb-2);
2.interpret the mean and the variance of a discrete random variable (M11/12SP-IIIb-3);
3.solve problems involving mean and variance of probability distributions (M11/12SP-IIIb-
4).

Primarily, the scope of this module is to develop your skill in computing for the mean
and variance of a discrete random variable. While going through this module, you are
expected to:
1.apply the important concepts of mean and variance of a discrete random variable;
2.compute and interpret the mean and variance of a discrete random variable; and
3.solve real-life problems involving mean and variance of probability distributions.

What I Know
Let us determine how much you already know about computing the mean and
variance of a discrete random variable. If you answer all the test items correctly in this
pretest, then you may skip studying this learning material and proceed to the next
learning module.

Direction: Read and understand each item, then choose the letter of the best answer
and write it on a separate sheet of paper.

1. Which of the following are TRUE statements?

I. The standard deviation of a random variable is equal to zero if it takes a single
value.
II. The standard deviation of a random variable can never be negative.
III. As the number of observations increases, the mean of a random variable will get
closer and closer to a particular value.
A) I and II C) II and III
B) I and III D) I, II and III

x+5
2. Can the function (𝑥) = , for x = 1, 2, and 3, be the probability distribution
21
for some random variable?

A)Yes.
B) No, since probabilities can never be negative.
C)No, since probabilities can never be greater than 1.
D)No, since probabilities do not add up to 1.
X
2. If (𝑋) = , what are the possible values of X for it to be a probability distribution?
9
A) 0, 2, 3 B) 1, 2, 3 C) 2, 3, 4 D) 3, 4, 5
For items 4-5, consider the following discrete probability distribution:
X 0 1 2 3 4
P(X) 1/5 1/5 1/5 1/5 1/5
 What is the expected value of the probability distribution?
A) 1 B) 2 C) 3 D) 4
4. What is the variance of the probability distribution?
A) 1 B) 2 C) 3 D) 4
For items 6-9, refer to the scenario and table provided below.
The number of male individuals living in the household on a
rand barangay is described by the following probability
distributio.
X 0 1 2 3 4
P(X) 0.10 0.25 0.30 0.25 0.10
6. What is the mean of the probability distribution?
A) 1.0 B) 1.5 C) 2.0 D) 2.5
7. What is the variance of the probability distribution?
A) 1.03 B) 1.05 C) 1.30 D) 1.50
8. What is the standard deviation of the probability distribution?
A) 1.01 B) 1.02 C) 1.14 D) 1.22
9. What is the probability that more than 2 male individuals will be in any household?
A) 0.35 B) 0.65 C) 0.90 D) 1.00
10. Suppose you are one of the 1,000,000 people who send their names through text
in an online raffle promo with 1 top prize of P50,000, 10 prizes of P20,000 and 100
prizes of P10,000. What will be your expected winnings?
A) 0.80 B) 1.00 C) 1.25 D) 1.50
11. Your mother wants you to choose one of the three boxes and pick a bill after. The
first box has two P1000-bill and eighteen P200-bill. On the other hand, the second
box contains ten P1000-bill and forty P100-bill and the third box has 14 P20-bill.
Which of the following claims is true with regards to the expected winnings?
A) The first box has the highest expected winning.
B) The expected winning of the second box is lower than of the third box.
C) The expected winning of the third box is higher than of the first box.
D) All boxes have the same expected winnings.
7. The Pangasinan Provincial Board approved an ordinance of mandatory wearing of face
shield in the province during the public health crisis due to coronavirus disease.
Suppose you have known that those who violated the ordinance are being fined with
various amounts with the following probabilities, what would be the mean and the
standard deviation of the distribution?
Fine (in pesos) 1,000 2,500 5,000
Probability 0.45 0.35 0.20
A) mean of 2326; standard deviation of 1493.55
B) mean of 2325; standard deviation of 1493.95
C) mean of 2324; standard deviation of 1493.35
D) mean of 2323; standard deviation of 1493.75

8. A non-profit organization in a certain municipality organizes a raffle for a cause. One

thousand raffle tickets are sold for P1.00 each. Suppose each has an equal chance of
winning for the following prizes: P300, P200, P100 and you have the expected winnings
of -0.30. What can you conclude?

A) On average, an individual will lose 0.30 per ticket purchased

B) On average, an individual will gain 0.30 per ticket purchased
C) On average, an individual will win the raffle with any prizes.
D) On average, an individual will not win the raffle with any prizes.
9. Suppose a discrete random variable X has the following probability distribution:
X 2 3 4 5
P(X) 0.35 0.23 n 0.11
 What is the value of n?
A) 0.13 B) 0.21 C) 0.31 D) 0.41
.
P(X)

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00
32 34 36 38 40
Number of Learners Present in a Week (X)

When we make decisions in real-life scenarios, we consider all potential outcomes,

their probabilities and assess the results. For example, a Grade 11 learner like you can
compute for the probability that 7 or 8 ballpens and 6 or 7 yellow pads will be used in
answering modules for the different subjects

What’s In Let’s have a review first.

In a certain school, the number of learners present during an online class in Statistics
per week is a random variable represented by X. The probability distribution for X is
presented below.

1. Find the probability that in a given week:

 a. at most 36 learners are present during an online class in Statistics?
b. at least 36 learners are present during an online class in Statistics?
c. at least 34 learner are present during an online class in Statistics?
d. exactly 40 learners are present during an online class in Statistics?

is the average number of learners present during an online class in a week?

2. Determine the variance and standard deviation of the given random variable.

What’s New
At this point of the module, you are about to learn the concept in computing mean
and variance of a discrete random variable. To understand better the concept, you will
have to perform the simple activity below.

Read and analyze the situation given below.

Mr. Tamondong, a PE teacher, manages to give an assessment composed of 4

performance tasks in the 3rd Quarter of the school year. He noticed that some learners
did not submit some of the performance tasks. He used to check the probability
distribution of the submitted performance tasks and the data is presented below.

0.45

0.40

0.35

0.30
Probability Distribution (Submission)

0.25

0.20

0.15

0.10

0.05

0.00
0 1 2 3 4
Number of Performance Tasks Submitted (PE)
Based on the data offered, answer the following questions:

1. What is the sum of all the probabilities of the given random variable (i.e. submission of
performance tasks by the learners)? _____________________
2. What have you noticed about the probability distribution? Can it take a negative
value? State your reason.
_______________________________________________________________________
_______________________________________________________________________
3. What is the average number of performance tasks submitted to Mr. Tamondong?
__________________________________________________________
4. Compute for the values of the variance as well as with the standard deviation of the
probability distribution?

Were you able to complete the task? If you answered yes, you can move on to the next
page. If not, take your time to finish so you can better appreciate the following
discussions.

What Is It
How did you find the activity? Were you given idea on how to compute for the mean and
variance of a discrete random variable? Let us process your answers.
1. Based from the task, the bar graph can be analyzed using the table below:
Number of Performance Tasks Submitted (X) 0 1 2 3 4
Probability Distribution of Submitted 0.10 0.10 0.25 0.40 0.15
Performance Tasks P(X)
As you can see from the table, the sum of all the probabilities of the given random
variable is equal to 1.
2. The probability distribution of the given random variable is less than 1. It will not
have a negative value since values are taken from 0 to 1.
3. The average number of performance tasks submitted is 2.40. ((𝑋) = 𝜇𝑋 =2.40)
4. The variance and standard deviation of the given random variable are as follows:
𝑉𝑎𝑟 (𝑋) = 𝜎𝑋2 = 1.34 𝜎𝑋 = 1.16
Were you able to get the same answers? If so, that's fantastic! If you are still
wondering how we happened to come up with the answers, particularly number 4,
you'll figure it out as the discussion progresses.
In the previous module, the concepts of mean and variance (as well as with the standard
deviation) were presented and illustrated.

Expected Value (or Mean) of a Discrete Random Variable

The expected value or mean of a discrete random variable is the sum of the products
generated by multiplying the possible values of X with their corresponding
probabilities. It usually denoted by μX or E(X) and calculated using:
𝒏

𝑬(𝑿) = 𝝁𝑿 = ∑ 𝑿𝒊 ∙ 𝑷(𝑿𝒊) = 𝑿𝟏 ∙ 𝑷(𝑿𝟏) + 𝑿𝟐 ∙ 𝑷(𝑿𝟐) + ⋯ + 𝑿𝒏 ∙ 𝑷(𝑿𝒏)

𝒊=𝟏

Suppose we take our previous data on the performance tasks submitted to Mr.
Tamondong, multiply each value (X) by its probability and add the results to get the
mean or expected value.
Performance Tasks Submitted Probability Distribution
(X) P(X) (X) ● P(X)

0 0.10 0.00
1 0.10 0.10
2 0.25 0.50
3 0.40 1.20
4 0.15 0.60

𝑬(𝑿) = 𝝁𝑿 = ∑ 𝑿𝒊 ∙ 𝑷(𝑿𝒊) = 𝑿𝟏 ∙ 𝑷(𝑿𝟏) + 𝑿𝟐 ∙ 𝑷(𝑿𝟐)+ 𝑿𝟑 ∙ 𝑷(𝑿𝟑)+ 𝑿𝟒 ∙ 𝑷(𝑿𝟒)+ 𝑿𝟓 ∙ 𝑷(𝑿𝟓)

 𝒊=𝟏

= (0)(0.10) + (1)(0.10) + (2)(0.25) + (3)(0.40) + (4)(0.15)

= 0 + 0.10 + 0.50 + 1.20 + 0.60
= 2.40
So, the expected value or mean of the given discrete random variable is 2.40.
Now that you know how to calculate the mean of a discrete random variable, you
must remember that for a set of data, you also need other measures like measures of
variability (i.e. variance and standard deviation) to see the difference of the value of X
from the mean.

Variance and Standard Deviation of a Random Variable

Recall that a variance of a random variable is given by

𝝈𝟐𝑿 = 𝑽𝒂𝒓(𝑿) = 𝑬(𝑿 − 𝝁)𝟐 = ∑(𝑿 − 𝝁)𝟐 ∙ 𝑷(𝑿)
The variance is a parameter that is used to assess the spread of the distribution (i.e.
how far the values of X are from the mean). Bear in mind that the greater the variance,
the more the X values deviate from the mean.
Alternatively, the standard deviation of a random variable is square root of the variance.
It is denoted by 𝝈𝑿 and computed using the following formula:

𝝈𝑿

To demonstrate how to compute the variance and standard deviation of a discrete

random variable, we will use the previous data on the number of performance tasks in
PE submitted to Mr. Tamondong.

For the variance, each value of X will be subtracted to the expected value (μ). Then
take the square and multiply it by its probability. Afterwards, add the products.

X P(X) (X)●P(X) (X - μ)2 (X - μ)2 ● P(X)

0 0.10 0.00 (0-2.40)2= 5.76 0.5760
1 0.10 0.10 (1-2.40)2= 1.96 0.1960
2 0.25 0.50 (2-2.40)2= 0.16 0.0400
3 0.40 1.20 (3-2.40)2= 0.36 0.1440
4 0.15 0.60 (4-2.40)2= 2.56 0.3840
2.40 1.3400
𝟐 𝟐
𝝁𝑿 = ∑ 𝑿 ∙ 𝑷(𝑿) 𝝈 = ∑(𝑿 − 𝝁) ∙ 𝑷(𝑿)
𝑿

𝝈𝟐𝑿 = 𝑽𝒂𝒓(𝑿) = 𝟏. 𝟑𝟒𝟎𝟎

For the standard deviation, take the square root of the variance.

𝝈𝑿 . 𝟏𝟔

Let us take another example.

According to the National ICT Household Survey (NICTHS) 2019, 12.3% or 154,243 of
the households in the Ilocos Region have used mobile phones. Suppose you know the
probabilities for the number of mobile phones in use per household. Based on the
prepared discrete probability distribution of the given random variable, determine the
mean, variance, and standard deviation.
Number of Mobile Phones in
0 1 2 3
Use per Household (X)
Probability Distribution P(X) 0.87 0.04 0.06 0.03
 Applying the concepts of the mean, variance and standard deviation in the above
situation, we will obtain the following

The expected value or mean is 0.25. The variance is 0.4875.

The standard deviation is .
 What’s More
Now, it’s your turn to apply the concepts on how to calculate the mean, variance, and
standard deviation of a discrete random variable.
Activity 3. Your Turn!
Direction: Read and analyze the situation below. Answer the questions as required.
1. According to the article – Social Media Usage in the Philippines by Sanchez (2020), the
Philippines has one of the highest numbers of social network users across Southeast Asian
nations with approximately 67% social media penetration rate. On average, Filipinos spent
almost four hours using social media where Facebook was the most used platform. Assume
you know the probability distribution of the number of hours an individual spends on
Facebook per week in a certain municipality of Pangasinan. The data are presented below.
Number of hours 2 3 4 5 6
using Facebook (X)
Probability P(X) 0.13 0.2 0.32 0.21 0.13
1

a. Compute for the mean, variance, and standard deviation.

b. What is the probability that an individual spends at least 4 hours using Facebook
weekly?

2. A milktea shop owner determines the number of milktea that is consumed each day. (a) Find
the mean, variance, and standard deviation for the distribution shown below. (b) If the
owner stated that 60 cups of milktea were consumed in one day, do you think that this
is a credible assertion?

Number of milktea 55
35 40 45 50
consumed (X)
Probability P(X) 0.10 0.1 0.40 0.15 0.25
0
3. The number of people using Shopee-Lazada app per day in San Carlos City is found in the
distribution below.

Number of
Shopee-Lazada app 100 150 200 250 300
users (X)
Probability P(X) 0.15 0.2 0.30 0.15 0.20
0

a. Compute for the mean, variance, and standard deviation for the given probability
distribution.
b. What is the probability that fewer than 200 or more than 250 people use Shopee-
Lazada app on a given day?
What I Have Learned
Great! You have reached this part of the module. To ensure that you fully comprehend the
concepts relating to the calculation of the mean and variance of a discrete random variable,
it is important that you are able to complete each statement below.

The expected value of a discrete random variable is ___________________________

____________________________________________________________________________.

The variance is ____________________________________________ while the standard deviation is

______________________________________________.

10
To find for the mean, ________________________________________________________.
Meanwhile, to compute for the variance, _____________________________________.
In addition, to determine the standard deviation, _____________________________.
What I Can Do
Activity 4. Investigation Time!

1. Assume that Raymund Gregory, a Grade 11 student, is scheduled to take a 20-item

summative assessment in Physical Science, Statistics and Probability, and Research
in Daily Life I. He knows he has a 50% chance of having a perfect score based on his
previous summative evaluations in each subject. Given that X represents the number
of perfect scores Raymund Gregory will obtain, determine the values and
corresponding probabilities of the distribution of X.
2. Assume that a fair coin is tossed and a fair die is rolled. In a game created by Yuno
and Asta, the highest number in each case determines the winner. Asta flips a coin
with the number 9 on one hand and the number 19 on the other. Yuno throws a die
with tens on four sides and twenty on two sides.
a. In the given situation, which character would you prefer - Yuno or Asta? Give a
reason for your decision.
3. To make the game equal, if Yuno receives P 50.00 for each win, what should
Asta receive for each win?
Assessment
Let us determine how much you have learned from this module. Read and understand
each item, then choose the letter of your answer and write it on your answer sheet.
1. If 𝐹(𝑋) = 𝑋 , what are the possible values of X for it to be a probability 150
distribution?
A) 10, 30, 50 C) 50, 60, 70
B) 30, 50, 70 D) 60, 70, 80
X +5
2. For x = 10, 20, and 30, can the function ℎ(𝑥) = be the probability
75
distribution for some random variable? A) Yes.
B) No, since probabilities can never be negative.
C) No, since probabilities can never be greater than 1.
D) No, since probabilities do not add up to 1.
For items 3-5, consider the following discrete probability distribution:
X 0 1 2 3 4
P(X) 3/15 3/15 3/15 3/15 3/15
3. What is the expected value of the probability distribution?
A) 1 B) 2 C) 3 D) 4
4. What is the variance of the probability distribution?
A) 1 B) 2 C) 3 D) 4
5. What is the standard deviation of the probability distribution?
A) 1.40 B) 1.41 C) 1.42 D) 1.43
For items 6-8, refer to the scenario and table provided below.
The number of female individuals living in the household on a randomly selected barangay
is described by the following probability distribution.
X 0 1 2 3 4
P(X) 0.10 0.20 0.40 0.20 0.10
6. What is the mean of the probability distribution?
A) 1.0 B) 1.5 C) 2.0 D) 2.5
7. What is the variance of the probability distribution?
A) 1.10 B) 1.15 C) 1.20 D) 1.25

11
8. What is the standard deviation of the probability distribution?
A) 1.10 B) 1.20 C) 1.30 D) 1.40

9. If the variance of a random probability distribution is 1.05, what is the standard

deviation?
A) 1.0125 B) 1.1025 C) 1.125 D) 1.25
For questions 10-13, refer to the following.
Suppose Hananiah Hermarie, a Grade 11 learner, recorded the probability distribution for
the number of yellow pads that she used in answering his modules in different subjects.
X 3 4 5 6 7
P(X) 0.10 0.20 0.25 0.20 0.25

10. What is the mathematical expectation of the given probability distribution?

A) 3.05 B) 3.50 C) 5.03 D) 5.30
11. What value corresponds to the variance of the distribution?
A) 1.17 B) 1.71 C) 2.17 D) 2.71
12. What is the probability that Hananiah Hermarie used at least 5 yellow pads?
A) 0.30 B) 0.50 C) 0.70 D) 0.75
13. Which of the following corresponds to the standard deviation of the distribution?
A) 1.31 B) 1.33 C) 1.35 D) 1.37
14. Which of the following refers to the sum of the product of X and P(X) of a discrete
random variable?
A) variance B) probability C) expected value D) deviation
15. Which of the following is a TRUE statement?
A) The probability distribution of a discrete random variable can be negative.
B) The expected value of a probability distribution is always equal to 1.
C) The variance is equal to the standard deviation of a probability distribution.
D) The mathematical expectation is the same with the mean value of a probability
distribution of a discrete random variable.

Additional Activities
1. Suppose John Paul Gabriel, a Grade 11 TVL HE learner, recorded the number of
cookies baked per day as part of his subject Bread and Pastry Production. The data are as
follows:

X (no. of cookies) 15 20 25 30 35 40
P(X) 0.10 0.15 0.25 0.25 0.15 0.10

a. What is the probability that John Paul Gabriel will bake more than 25 cookies?
b. What is the probability that John Paul Gabriel will bake less than 30 cookies?
c. Find the mathematical expectation (mean) and variance of the given discrete random
variable.

2. The Grade 11 HUMSS learners wanted to know the number of ballpens used by Grade
11 learners in answering their modules in different subjects for the First Semester of the
School Year 2020-2021. The following distribution was documented:

X (no. of ballpens) 4 5 6 7 8 9
P(X) 0.05 0.13 0.17 0.28 0.22 0.15

a. What is the probability that a Grade 11 learner will use less than 7 ballpens in
answering modules?

12
 b. What is the probability that a Grade 11 learner will use more than 6 ballpens in
answering modules?
c. Compute for the mean, variance, and standard deviation of the given discrete random
variable.

Solving Problems Involving

Mean and Variance of a
Lesson 2 Discrete Random Variable
In the previous lesson, you have learned how to compute and interpret mean and variance
as well as with the standard deviation of a discrete random variable. In this lesson, you will
use those measures in solving problems involving reallife situations and explain also how
mathematical expectation are computed for probability distributions.

What’s In
For you to begin the new lesson, let us review the previous one. You have learned that the
mean or expected value of a discrete random variable is computed by adding all the product
of possible X values and each probabilities. In symbol,
𝒏

𝑬(𝑿) = 𝝁𝑿 = ∑ 𝑿𝒊 ∙ 𝑷(𝑿𝒊) = 𝑿𝟏 ∙ 𝑷(𝑿𝟏) + 𝑿𝟐 ∙ 𝑷(𝑿𝟐) + ⋯ + 𝑿𝒏 ∙ 𝑷(𝑿𝒏)

𝒊=𝟏

On the other hand, the variance and standard deviation of a discrete random variable
explain the amount of spread, variation or dispersion of the values in the distribution. It is
important to note that standard deviation is the square root of variance. Hence, variance is
the square of a given standard deviation. Both measures are computed using the following
formula:
Variance (σ2)
𝝈 𝟐𝑿 = 𝑽𝒂𝒓(𝑿) = 𝑬(𝑿 − 𝝁)𝟐 = ∑(𝑿 − 𝝁)𝟐 ∙ 𝑷(𝑿)
𝒐𝒓 𝝈𝟐𝑿 = ∑[𝑿𝟐 ∙ 𝑷(𝑿)] − 𝝁𝟐

Standard
deviation (σ)
𝝈𝑿

𝒐𝒓
√∑[𝑿 𝟐 ∙ 𝑷(𝑿)] − 𝝁𝟐

Example: Suppose the following table shows the probability distribution of the class
scores (X) in a 20-item summative assessment in Statistics and Probability. Compute for
the mean, variance and standard deviation of the random variable.
X 14 15 16 17
P(X) 0.20 0.30 0.30 0.20 Solution:
a. Mean
𝒏

𝑬(𝑿) = 𝝁𝑿 = ∑ 𝑿𝒊 ∙ 𝑷(𝑿𝒊) = 𝟏𝟒(𝟎. 𝟐𝟎) + 𝟏𝟓(𝟎. 𝟑𝟎) + 𝟏𝟔(𝟎. 𝟑𝟎) + 𝟏𝟕(𝟎. 𝟐𝟎)
𝒊=𝟏

= 𝟐. 𝟖𝟎 + 𝟒. 𝟓𝟎 + 𝟒. 𝟖𝟎 + 𝟑. 𝟒𝟎

13
= 𝟏𝟓. 𝟓𝟎

14
 b. Variance (using the formula 𝝈𝟐𝑿 = ∑ [𝑿𝟐 ∙ 𝑷(𝑿)] − 𝝁𝟐 )
X P(X) X2 X2 ● P(X)
14 0.20 196 39.20
15 0.30 225 67.50
16 0.30 256 76.80
17 0.20 289 57.80
∑[𝑿𝟐 ∙ 𝑷(𝑿)] =
241.30

𝝈𝟐𝑿 = ∑[𝑿𝟐 ∙ 𝑷(𝑿)] − 𝝁𝟐

𝝈 = 241.30 – (15.50)2
𝟐
𝑿
𝝈 = 241.30 – 240.25
𝟐
𝑿
𝝈𝟐𝑿 = 1.05
c. Standard deviation
𝝈𝑿 = √∑[𝑿𝟐 ∙ 𝑷(𝑿)] − 𝝁𝟐
𝝈𝑿 = √𝟏.𝟎𝟓
𝝈𝑿 = 𝟏.𝟎𝟐
Therefore, the mean of the given discrete random variable is 15.50; the
variance is 1.05 and the standard deviation is 1.02.
What’s New
At this point of the module, you are about to learn how to solve problems
involving mean and variance of a discrete random variable. To understand
better the concept, you will need to complete the simple activity below.
Activity 1: Pick-A-Box
The mother of Raymund Gregory wants him to choose one of the three boxes
and pick a bill after. The three boxes containing different denominations are
shown below.

Images source: https://en.wikipedia.org/wiki/Banknotes_of_the_Philippine_peso

Makisig Box Mayumi Box Maharlika Box

17 pcs. 16 pcs 15 pcs

3 pcs. 4 pcs 5 pcs

Questions:
1. What is the expected winnings for each box?
2. Which box would you recommend to Raymund Gregory if you were his
friend? Give a reason for your decision.

Activity 2: Win-Win Investment

Suppose your parents wanted to invest their money in a certain financial

institution. The three financial institutions have the following offers:
GINTO Investment PILAK Investment TANSO Investment
gives your parents gives your parents a gives your parents
 a
50% chance of
25% chance of
making an 85% chance of
making P250,000.00, P100,000.00,
P500,000.00, otherwise they lose otherwise they make
otherwise they lose P175,000.00 only P5,000.00
P50,000.00
Questions:
1. What sort of investment should your parents make? Give a justification for
your choice.
2. If your parents assume they will go bankrupt if they do not make a profit,
which investment should they make for the best chance of avoiding
bankruptcy? Give a reason for your answer.
Were you successful in completing the task? If you answered yes, you can move
along to the next page. If not, take your time to complete so you can learn to
appreciate the accompanying discussions.
What Is It
What were your impressions about the activities? Have you ever been provided
with the opportunity on how to calculate the expected value or mathematical
expectation for a probability distribution that is used to solve real-life problems?
Real-world problems involving probability representations often ask if a particular
experiment would possibly result in a gain or a drawback. Expected value or
mathematical expectation plays an essential role in various aspects of games of
chance, in investments, in insurance, in decision theory and the like. Hence,
mathematical expectation encompasses actual and/or real decision.
The expected value or mathematical expectation is given by the mean of the
probability distribution. In real-life situations, a positive expected value expresses
a gain while a negative expected value describes a loss. It is obtained by
multiplying each value of X to each of the corresponding probability P(X). In
symbol,
E(X) = Ʃ X ● P(X) Let’s
decipher the previous activities.
Pick-A-Box Activity
1. The expected values of each box are as follows:
a. For Makisig Box:
X 20 1000

P(X) 17/20 3/20

E (X) =

(1000) = 17 + 150 = 167

𝐸(𝑋) = (20) +

For Mayumi Box:

X 50 500
b.
P(X) 16/20 4/20
 (𝑋) = (50) + (500) = 40 + 100 = 140

c. For Maharlika Box:

X 100 200
P(X) 15/20 5/20

(𝑋) = (100) + (200) = 75 + 50 = 125

2. In comparison to the other boxes, I would advise Raymund Gregory to pick
Makisig Box because it has the highest expected value.
Win-Win Investment Activity
1. The expected value of each investment is given below:
GINTO (G) PILAK (P) TANSO (T)
Investment Investment Investment
Outcome Gain Loss Gain Loss Gain Loss
Probability 0.25 0.75 0.50 0.50 0.85 0.15
Random 500,00 - 250,00 - 100,000 -5,000
variable 0 50,00 0 80,000
0
E(G) = 0.25(500,000) + 0.75(-50,000) = 125,000 - 37,500 = P87,500.00
E(P) = 0.50(250,000) + 0.50(-80,000) = 125,000 – 40,000 = P85,000.00
E(T) = 0.85(100,000) + 0.15(-5,000) = 85,000 – 750 = P84,250.00
My parents should choose the offer of GINTO Investment because the expected
value of P87,500 is the highest among the three investments.
2. Despite the fact that GINTO and PILAK investments have higher expected
values than TANSO investment, my parents should opt for TANSO investment
because it has a better chance of preventing bankruptcy.
What’s More
Now, it’s your turn to apply the concepts on how to calculate and interpret
mathematical expectation or mean of a discrete random variable.
Activity 3. Solving EXPECTEDly!
Direction: Read and analyze the situations. Answer the questions as required.
1. Suppose Mahika Kagamitan Center will hold its annual raffle bonanza. A
flat screen TV worth P17,500 is up for grabs with 5,000 tickets priced at
P50.00 each. What is the expected value of Juan Emilio’s gain if he buys 15
tickets?
2. Assume there are 100 prizes of P100, 50 prizes of P200, and five prizes of
P1000 in a lottery. What is a fair price to charge for a ticket if there are 5,000
tickets to be distributed and sold?
3. Assume there are three prizes available in an online raffle for a good cause:
one P5,000 prize, one P3,000 prize, and one P1,500 prize. A total of 1,000
tickets will be sold for P20 each. What is the mathematical expectation if a
person buys one ticket?

What I Have Learned

This is amazing! You have reached this part of the module. To ensure you
have a complete understanding on the concepts relating to the calculation of
 the expected value or mean and variance of a discrete random variable, it is
necessary that you complete each statement below.
1. The ____________________________ is the mean of a random variable.
2. If expected value is positive, then a ______________ is expected.
3. If expected value is negative, then a ______________ is likely to occur.
4. To compute for the expected value, the formula to be used is _______________.
5. In obtaining the mathematical expectation of a certain random variable, get the
sum of all the products formed by the _____________ and ______________.
What I Can Do
Activity 4. You Can Do It!
Suppose you will be designing a game or problem using expected value. By filling
out the table below, you will construct a problem where the expected value
represents a gain or win and/or illustrates a drawback eventually. The first item
has already been presented for your reference.
Gain Loss
Lottery Assume you will choose a number Assume you'll choose a number from
from 1 to 100 and pay P5.00. If 1 to 100 and pay P15.00. You will be
your number is called, you will be given P1000 if your number is called.
awarded P1000. You have 0.01 You have a 0.01 chance of winning.
chance to win. Determine the Calculate your profit's expected
expected value of your profit. value.
Raffle Draw
Insurance/Investment

Assessment
Let us determine how much you have learned from this module. Read and
understand each item. Choose the letter of your answer and write it on your
answer sheet.
1. Suppose you are one of the 10,000 people who send in their name through text
in an online raffle promo with 10 prizes of P5,000, 25 prizes of P2,000 and 50
prizes of P1,000. What will be your expected winning?

A) 5 B) 10 C) 15 D) 20
2. Your mother wants you to choose one of the three boxes and pick a bill after.
The first box has two P1000-bill and eighteen P200-bill. On the other hand,
the second box contains ten P1000-bill and forty P100-bill and the third box
has 14 P20-bill. Which of the following claims is true with regards to the
expected winning?
B) The first box has the highest expected winning.
C) The expected winning of the second box is lower than of the third box.
D) The expected winning of the third box is higher than of the first box.
E) All boxes have the same winnings.
3. The Pangasinan Provincial Board approved an ordinance of mandatory
wearing of faceshield in the province during this public health crisis due to
coronavirus disease. What is the mean and standard deviation of the
distribution if you know that those who violated the ordinance are being
charged with different amounts with the following probabilities?
Fine (in pesos) 1,000 2,500 5,000
Probability 0.25 0.45 0.30

A) mean of 2875; standard deviation of 1515.54

B) mean of 2857; standard deviation of 1515.54
C) mean of 2875; standard deviation of 1515.45
D) mean of 2857; standard deviation of 1515.45
 2. In a specific municipality, a non-profit group organizes a raffle for a good cause.
One thousand raffle tickets cost P1.00 each. Assume that everyone has an
equal chance of winning the P300, P200, and P100 prizes, and that an
individual has an estimated winnings of 0.25. What can you conclude?
A) On average, an individual will lose 0.25 for every ticket purchased.
B) On average, an individual will gain 0.25 for every ticket purchased.
C) On average, an individual will win the raffle with any prizes.
D) On average, an individual will not win the raffle with any prizes.
3. Suppose a discrete random variable X has the following probability
distribution:
X 2 3 4 5
P(X) 0.35 0.23 n 0.11
What is the value of n?
E) 0.13 B) 0.21 C) 0.31 D) 0.41
4. Suppose there are 7 outcomes to an experiment in a discrete random variable.
You have computed the corresponding probability of the outcomes: 0.30, 0.30,
0.40, 0.20, 0.25, -0.25, -0.20. What can be said about the probability of the
outcomes?
A) One of the outcomes will take place 40% of the time.
B) Two of the outcomes will never happen.
C) The total of the probabilities is 1.
D) The probabilities range from 0 and 1.
3. Which of the following measures defines the mathematical expectation of a
probability distribution?
A) mean B) standard deviation C) sum D) variance
4. A research team gathered the following discrete probability distribution. In this
distribution X represents the number of mobile phones owned by a family
residing in Merryland Subdivision. What is the mean value of the distribution?
X 0 1 2 3
P(X) 0.10 0.10 0.50 0.30
A) 1.0 B) 1.5 C) 2.0 D) 2.5
For questions 9-12, refer to the following.
Suppose a certain rural bank in your municipality offered you an investment
opportunity. Its outcomes and probabilities are presented in the following table.
X - P 5,000.00 P0 P 5,000.00
P(X) 0.30 0.40 0.30
5. Which of the following statements is true?
A) The distribution is symmetric. C) The distribution is bimodal.
B) The distribution has a negative mean. D) The distribution has a mean of 3.
10. What is the mean of the distribution?
A) P 5,000.00 B) P 2,500.00 C) P 1,000.00 D) P 0.00
11. What is the variance of the distribution?
A) P150,000,000 B) P15,000,000 C) P1,500,000 D) P10,500,000
12. What is the standard deviation of the distribution?
A) P 3872.98 B) P 3827.98 C) P 3872.89 D) P 3827.89

22
For questions 13-15, refer to the following.

Assume that an insurance firm, Hermari Life Insurance, provides a one-year term
life insurance policy to a 35-39 year old woman. The woman pays a premium of
P50,000. If she dies within a year, the insurance firm will give her beneficiaries
P750,000. According to the 2019 Philippine Statistics Authority Death Statistics
Table, the probability that a 35-39 year old woman will not survive in 1 year is
0.0002.

13. Given X as the net gain of Hermari Life Insurance, which of the following
tables of values represents the probability distribution of X?
A) X 50,000 700,000 C) X 49,980 700,020
0.9998 0.0002 P(X) 0.9998 0.0002
P(X)
B) X 50,000 700,000 D) X 49,980 700,020
0.998 0.002 P(X) 0.998 0.002
P(X)
14. Given that a 35-39 woman will have a 0.0002
chance of not surviving within a year, what is the probability that she will survive
A) 0.998 B) 0.9998 C) 0.99998 D) 0.999998

15. What is the expected value of Hermari Life Insurance’s profit on the policy?
A) 49,805 B) 49,085 C) 49,850 D) 49,980

Additional Activities

Solve the following problems as required.

1. Based on data from the 2019 Philippine Statistics Authority Death

Statistics Table, the probability that a 70-74 year old man will not be alive
in 1 year is 0.1028. Assume Sipnayan Life Insurance, an insurance
provider, charges P40,000 to cover a 70-74 year old man for the whole year.
If he does not live within a year, the insurance firm will pay P380,000 to his
survivor as a death benefit. Determine and interpret the mathematical
expectation of profit on the policy of the insurance company.

2. Maria Ophelia Louise intends to invest P500,000 in establishing a company

FAROAH clothing line. She estimates that she has a 0.20 probability of
making a P500,000 profit, a 0.25 probability of making a P2,500,000 profit,
a 0.35 probability of making no profit. What is the expected value of the
profit? Should Maria Ophelia Louise continue on this kind of investment
with her clothing line?

23
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Belecina, R. R., Baccay, E. S., and Mateo, E.B. (2016). Statistics and
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Bluman, A. (2015). Elementary Statistics: A Step by Step Approach. London:

McGraw-Hill Education - Europe. pp. 258-274

Brase, C. H. and Brase, C. P. (2004, 2019). Understanding Basic Statistics 3rd

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Commission on Higher Education (2016). Teaching Guide for Senior High

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Department of Education – Schools Division of Bataan (2020). Statistics and

Probability Quarter 3 Module 3: The Normal Distribution. Balanga City,
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Marquez, M.P. N. (2005). Statistics in Social Sciences (Slidedeck/handouts).

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Sternstein, M. (2007). Barron’s AP Statistics 4th edition. New York: Barron

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Metropolitan Community College (2021). Expected Value. Retrieved on

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Philippine Statistics Authority (2019 Death Statistical Tables). Retrieved on

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2019

Rapid Table Page (2020). Variance Calculator. Retrieved on January 28, 2021
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