TABLE OF CONTENTS

Content Page Number

Information Sheet 1.1 Random Variables and Probability Distributions……..……………….3

Information Sheet 1.1-3 Mean and Variance of Discrete Random Variables…….………………....4
Review of Probability Distributions……..............................................4
The Mean and Variance of a Random Variable……………………………4
Examples of Finding and Interpreting the Mean and Variance………..5
Mean of a Continuous Random Variable…………………………………….8
Key Points…………………………………………………………………………..8

Self Check 1.1-3…………………………………………………………………………………………………..9

Activity Sheet 1.1-3………………………………………………………………………………………….....10
Scoring Rubrics 1.1-3…………………………………………………………………………………………..10

References………………………………………………………………………………………………………….10

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 Information Sheet 1.1
RANDOM VARIABLES AND PROBABILITY DISTRIBUTIONS

Content Standard:
The learner demonstrates understanding of key concepts of
random variables and probability distributions.

Performance Standard:
The learner is able to apply an appropriate random variable for a
given real-life problem (such as in decision making and games of
chance).

Learning Outcomes:
After reading this INFORMATION SHEET, YOU MUST be able to:
1. illustrates the mean and variance of a discrete random
variable (M11/12SP-IIIb-1);
2. calculates the mean and the variance of a discrete random
variable (M11/12SP-IIIb-2);
3. interprets the mean and the variance of a discrete random
variable (M11/12SP-IIIb-3); and
4. solves problems involving mean and variance of probability
distributions (M11/12SP-IIIb-4).

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 Information Sheet 1.1-3
MEAN AND VARIANCE OF DISCRETE RANDOM VARIABLES

Learning Objectives:
After reading this INFORMATION SHEET, YOU MUST be able to:
1. describe or illustrate the mean and variance of a discrete random variable ;
2. compute for the mean and variance of a discrete random variable; and
3. provide an interpretation of the mean and variance of a discrete random variable.

Review of Probability Distributions

Ask learners to toss three coins ten times and record the number of heads on each toss.
Divide the class into groups of five learners. Tell each learner to get the average of the number of
heads obtained for the first five tosses, and the average of all the ten tosses. Then, in groups of
three to five, get the average of the averages that the groups got. If possible, ask learners to get
the average for the entire class.
Next, ask learners what the possible number of heads was. They should say 0, 1, 2, 3.
Next, ask them what the range of the average of the first five tosses was. Ask what the highest
and lowest values are in the class. Record the number on the board. Do this also for the average
of the ten tosses, the average of each group, and, finally, record the average of the class. Ask
learners what they notice about the average of the number of heads. Also, ask them what they
notice about the range of values as the number of tosses is increased. They should have noticed
fluctuations in the averages, but the averages approach 1.5, and the range of values from the
averages gets narrower with more data (i.e. more students giving information).

The Mean and Variance of a Discrete Random Variable

Recall the lesson three for this chapter (on Probability Distributions of Discrete Random
Variables). List down the distribution of the number of heads in tosses of three fair coins (or
three independent tosses of one fair coin). If possible, ask learners to complete the first two
columns of the table. Then, add another column for the product of the entries of the first and
second columns, (X) P(X). After completing the table, ask them to get the total of the row. Ask
them to fill out the entries. Leave a fourth row which will be filled out later.
X=number of heads P(X) (X)P(X)
0 1/8 0
1 3/8 3/8
2 3/8 6/8
3 1/8 3/8
Total 12/8 = 1.5

Ask them what multiplying X and P(X) resembled. They should have seen that it
resembled getting a “weighted average” of data, with the probabilities serving as weights. Ask
them about how the sum compares to the value that they got from the activity. They should
notice that the average they got gets closer and closer to 1.5 as the number of values you
average increases. This is related to the concept of the Mean of a random variable.
Now, formally define the mean of a discrete random variable.
Definition
Given a discrete random variable X, the mean, denoted by μ, is the sum of the products formed
from multiplying the possible values of X with their corresponding probabilities. It is also called
the expected value of X, and given a symbol E(X). More formally:
μ = E(X) = ∑ ( )

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 Help learners recall that empirical probabilities tend toward theoretical probabilities and,
in consequence, the mean is also a long-run average. This can be observed from the results of
the activity. As the number of trials of a statistical experiment increases, the empirical average
also gets closer and closer to the value of the theoretical average. Inform learners that this is why
we can interpret the mean as a long-run average.
Remind learners that if they have three coins tossed (and if all coins are fair), then they
would have eight possible outcomes—HHH, HHT, HTH, HTT, THH, THT, TTH, TTT. And if they
would repeat tossing these coins 8000 times, they would expect 1000 tosses of each of the
outcomes and, thus, the expected frequency of 3 heads would be 1000 tosses; of 2 heads, would
be 3000 tosses; of 1 head, would be 3000 tosses; and no heads, would be 1000 tosses. If we
average these, we would have
( )( ) ( )( ) ( )( ) ( )( )

Tell learners that although the Mean is called an “expected value,” this should not be
interpreted as the actual expected result when they do an experiment. In the example for tossing
three coins, the mean is 1.5. Point out that when you toss three dice, you cannot get 1.5 heads
out of it. This indicates that the Mean is not necessarily a possible value of the random variable.
So learners cannot simply say that the Mean is what they expect to be the number of heads
when they toss three coins. Rather, it is to be interpreted as a long-run average. Mention also to
them that the Mean is the value that we expect the long-run average to approach and it is not
the value of the random variable X that we expect to observe.
Next, have learners recall that the average of a given set of data is a measure of central
tendency. Inform them that the expected value—being an average— measures the center of the
distribution of the possible values of X.
Mention that the mean of a (discrete) random variable X can be given as a physical
interpretation. Suppose we imagine that the x-axis is an infinite see-saw in each direction, and
at each possible value of X, we place weights equal to the corresponding probabilities. Then, the
mean is at a point which will make the seesaw balanced. In other words, it is at the center of
gravity of the system. It may be helpful to give other examples to help learners gain more
insights.

Examples of Finding and Interpreting the Mean and Variance

A. Example with biased dice

Recall the biased six-sided dice with a probability distribution for X, the number of spots on the
upward face when the die is rolled, given as follows:
i 1 2 3 4 5 6
P(X=i)

The expected value of the distribution may be calculated as follows:

μ = E(X) = ∑ ( )= + 2( ) + ( ) + ( ) + ( ) + ( ) =

If q = 0, then this reduces to a fair dice, for which, we would have a long-run average of
3.5 for the number of spots on the upward face.

Provide another example that is used in the real world, such as the following:

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B. Practical Example Used in Insurance
An insurance company sells life insurance of Php500,000 for a premium or payment of
Php10,400 per year. Actuarial tables show the probability of normal death in the year following
the purchase of this policy is 0.1%. What is the expected “gain” for this life insurance policy?
Inform learners there are two simple events here. Either the customer will live this year or
will die (a normal death). The probability of a normal death, as given by the problem, is 0.001,
which will yield a negative gain to the insurance company in the amount of -489,600 =
Php10,400 - Php500,000. The probability that the customer will live is 1- 0.001=0.999. Thus,
the insurance company’s expected gain X from this insurance policy in the year after the
purchase has the following probability distribution:
Gains Outcome Probability
10,400 Live 0.999
-489,600 Normal Death 0.001
m = (10,400)(0.999)+(-489,600)(0.001) = 9,900

Learners should take note that if the insurance company were to sell a very large number
N of the Php500,000 insurance policies to many people, with the long-run average profit per
insurance policy is hp,900, the company would be expected to make a total profit of N times
Php9,900.
Next, ask learners whether a measure of central tendency is the only relevant summary
measure. They should remember that for a set of data, we also need other summary measures,
such as measures of variability. Learners have already met the concepts of variance and
standard deviation when summarizing data. Assist them to remember that the variance and
standard deviation of a set of data are measures of spread. Tell learners that random variables
also have a variance (and a standard deviation). The variance is derived by getting the expected
value of (X-μ) 2 where μ is the Mean.
To illustrate, go back to the Table on flipping three coins and get the number X of heads
in these three coins. Now, add the two columns with the following heading in bold (See below.),
and fill the corresponding values.

The total in the last column is called the variance of the random variable, and the square
root, 0.866, is the standard deviation.
Now, define the variance of a random variable as the weighted average of squared
deviations of the values of X from the mean, where the weights are the respective probabilities.
The variance, usually denoted by the symbol , is also denoted as Var(X) and formally defined
as

The variance gives a measure of how far the values of X are from the mean. Ask learners
what the variance is when X is a constant with probability of one. Learners should be able to say
that it is zero in this case (just as it was in the case of a set of data that does not vary). Inform
learners that in nontrivial case (i.e. when there is more than one possible distinct value of X), the
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variance will be a positive value. The bigger the value of the variance, the farther the values of X
get from the mean.
Define the standard deviation as the square root of the variance of X. That is, = √ ( )

C. Example of Gains in Life Insurance

Show the following calculations for “deviations” formed from subtracting the mean from
the gains, as well as squared deviations, and weighted squared deviations.
Gains Probability Deviations Squared Weighted
Deviations Squared
Deviations
10,400 0.999 10,388.73 107925794 107817868
-489,600 0.001 -490.466 240556.92 240.55692

The variance is the sum of the entries on the last column, i.e.,
s2 =107817868+240.55692 =107818108

while the standard deviation is the square root of the variance

s = 10383.55

Remind learners that the standard deviation is the more understandable of the two
measures of spread, since the standard deviation is in the same units as X. For example, if X is a
random variable representing the number of heads in three tosses of a fair coin, then the units
for standard deviation is “heads,” while the variance is in square heads (heads2).
Unlike the mean, there is no simple interpretation for the variance or standard deviation.
The variance though is analogous to the moment of inertia in Physics, but that is not necessarily
widely understood by learners. Stress that, in relative terms,
• a small standard deviation (and variance) means that the distribution of the random variable is
quite concentrated around the mean
• a large standard deviation (and variance) means that the distribution is rather spread out, with
some chance of observing values at some distance from the mean

Inform learners that, in practice, the variance is not computed with the definition, but
rather using the following result:
= Var (X) = EX2 - µ2
Thus, the variance is the difference between the expected value of X2 and the square of
the mean.
Explanatory Note:
This can be derived from the definition, some algebraic expansion of a binomial
expression, and some properties of expected values (such as the mean of a constant is the
constant):

It is suggested though that this derivation not be discussed in class. It may be helpful
though to use this computational formula, and to use computers whenever possible.

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Mean of a Continuous Random Variable
Ask learners what they think would be the expected value of X if X were continuous with
probability density function f(x). They should provide the equivalent quantity for a continuous
random variable involving an integral. That is, the mean E(X) of a continuous random variable
X with probability density function f(x) is
E(X) = ∫ ( )
Tell learners that integrals may be viewed as sums if the curve is “discretized.” Also, tell
them when looking at a probability density function, they can locate the mean by determining
the “center of gravity” of the curve, i.e. where the pivot should be placed to make the probability
density function balanced on the x-axis, imagining that the probability density function is a thin
plate of uniform material, with height f(x) at x.
An important consequence of this is that the mean of any random variable (continuous or
discrete) that has a symmetric distribution is always on the axis of symmetry of the distribution.
For a continuous random variable, this means the axis of symmetry of the probability density
function.

KEY POINTS
• The mean (or expected value) of a discrete random variable, say X, is a weighted average of the
possible values of the random variable, where the weights are the respective probabilities

• The variance is the expected value of the squared deviations from the mean.

• The standard deviation is the square root of the variance

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 Self- Check 1.1-3

Multiple Choice: Choose the best answer. Encircle your answer.

1. It is the weighted average of the possible values of a random variable.
A. mean B. none of these choices C. variance D. standard deviation

2. It is a measure of the dispersion of a set of data from its mean.

A. mean B. none of these choices C. variance D. standard deviation

3. It measures how far a set of random numbers are spread out from their average value.
A. mean B. none of these choices C. variance D. standard deviation

4. The mean is also called as the expected value or the __________.

A. set B. variance C. weighted average D. standard variance

5. The variance of a discrete random variable is the weighted average of the possible
values that a random variable can take.
A. partly false B. partly true C. false D. true

6. The variance measures how far a set of random numbers are spread out from their
mean.
A. partly false B. partly true C. false D. true

7. Mean is also called as the average of the given data.

A. partly false B. partly true C. false D. true

8. Given the Probability Distribution table, determine the mean.

x 1 2 3 4
P(x) 0.50 0.25 0.75 0.85
A. 5.21 B. 7.45 C. 6.65 D. 2.41

9. Given the Probability Distribution table, determine the variance.

x 1 2 3 4
P(x) 0.50 0.25 0.75 0.85
A. 37.3 B. 24.2 C. 55.3 D. 11.5

10. Given the Probability Distribution table, determine the standard deviation.
x 1 2 3 4
P(x) 0.50 0.25 0.75 0.85
A. 5.21 B. 2.41 C. 9.15 D. 6.10

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 Activity Sheet 1.1-3
A discrete random variable X has the following probability distribution:
x 0 1 2 3
P(x) 0.125 0.625 0.125 0.125
1. Compute the expected value of the random variable X.
2. Compute the variance of X.
3. Compute the standard deviation of X.

Scoring Rubrics 1.1-3

CRITERIA WEIGHT TOTAL

Problems are answered completely and correctly 40%
Computations are correct and complete. 30%
The written work is neat and no erasure and answers are written 20%
in the title page
The creativity of the cover 10%
TOTAL 100%

References:
De Veau, R. D., Velleman, P. F., and Bock, D. E. (2006). Intro Stats. Pearson Ed. Inc.

Workbooks in Statistics 1: 11th Edition, Institute of Statistics, UP Los Baños, College Laguna
4031

Probability and Statistics Module 19: Discrete Probability Distributions. (2013) Australian
Mathematical Sciences Institute and Education Services Australia. Retrieved from
http://www.amsi.org.au/ESA_Senior_Years/SeniorTopic4/4_md/SeniorTopic4c.html#content_3
http://www.amsi.org.au/ESA_Senior_Years/SeniorTopic4/4_md/SeniorTopic4c.html#content_5
http://www.amsi.org.au/ESA_Senior_Years/SeniorTopic4/4_md/SeniorTopic4c.html#content_6

[staslectures]. Mean and Expected Value of Discrete Random Variables. Retrieved from
https://www.opened.com/video/mean-and-expected-value-of-discrete-random-
variables/116285 https://www.opened.com/video/variance-and-standard-deviation-of-discrete-
random-variables/116286 https://www.opened.com/video/mean-e-x-and-variance-var-x-for-
continuous-random-variables/116287

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