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Mean and Random Variable

The document defines mean, variance, and standard deviation for discrete random variables. It then provides an example of calculating the mean, variance, and standard deviation for a discrete random variable with a given probability distribution. Specifically: - It defines mean as the expected value or average value of a discrete random variable, calculated as the sum of each possible value multiplied by its probability. - It provides an example calculating the mean of a discrete random variable with a given probability distribution. - It defines variance and standard deviation as measures of variability of a discrete random variable's possible values. Variance is the expected value of the squared deviations from the mean, while standard deviation is the square root of the variance. -

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82 views4 pages

Mean and Random Variable

The document defines mean, variance, and standard deviation for discrete random variables. It then provides an example of calculating the mean, variance, and standard deviation for a discrete random variable with a given probability distribution. Specifically: - It defines mean as the expected value or average value of a discrete random variable, calculated as the sum of each possible value multiplied by its probability. - It provides an example calculating the mean of a discrete random variable with a given probability distribution. - It defines variance and standard deviation as measures of variability of a discrete random variable's possible values. Variance is the expected value of the squared deviations from the mean, while standard deviation is the square root of the variance. -

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Definition: mean

The mean (also called the "expectation value" or "expected value") of a discrete random
variable X is the number
μ=E(X)=∑xP(x)
The mean of a random variable may be interpreted as the average of the values
assumed by the random variable in repeated trials of the experiment.

Question​: Find the mean of the discrete random variable X whose probability
distribution is

Solution: μ=∑xP(x)
=(−2)(0.21)+(1)(0.34)+(2)(0.24)+(3.5)(0.21)
=1.135

Question​: A service organization in a large town organizes a raffle each month. One
thousand raffle tickets are sold for $1 each. Each has an equal chance of winning.
First prize is $300 , second prize is $200 , and third prize is $100 . Let X denote the
net gain from the purchase of one ticket.
a) Construct the probability distribution of X .
b) Find the probability of winning any money in the purchase of one ticket.
c) Find the expected value of X , and interpret its meaning.

Solution: ​a) If a ticket is selected as the first prize winner, the net gain to the purchaser
is the $300 prize less the $1 that was paid for the ticket, hence X=300−11=299 .
There is one such ticket, so P(299)=0.001 . Applying the same “income minus outgo”
principle to the second and third prize winners and to the 997 losing tickets yields the
probability distribution:
1

b) Let W denote the event that a ticket is selected to win one of the prizes. Using the
table
P(W)=P(299)+P(199)+P(99)=0.001+0.001+0.001=0.003

c)​ Using the definition of expected value


E(X)=(299)⋅(0.001)+(199)⋅(0.001)+(99)⋅(0.001)+(−1)⋅(0.997)
=−0.4

The negative value means that one loses money on the average. In particular, if
someone were to buy tickets repeatedly, then although he would win now and then, on
average he would lose 40 cents per ticket purchased.

Definition: variance

The variance ( σ2 ) of a discrete random variable X is the number

which by algebra is equivalent to the formula

Definition: standard deviation

The standard deviation, σ , of a discrete random variable X is the square root of its
variance, hence is given by the formulas:

The variance and standard deviation of a discrete random variable X may be


interpreted as measures of the variability of the values assumed by the random variable
in repeated trials of the experiment. The units on the standard deviation match those of
X.

Question:​ A discrete random variable X has the following probability distribution:


2

A histogram that graphically illustrates the ​probability distribution is given in


Figure below:

Compute each of the following quantities.

Solution:
3

f. Using the formula in the definition of ​μ

g.

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