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Reading Workshop by Slidesgo

The document provides an overview of key concepts related to expected value and variance/standard deviation of random variables. It defines expected value as a weighted average of possible variable values that provides a measure of the central tendency. Variance measures the spread or variability of a distribution, while standard deviation looks at how spread out values are from the mean. Several examples are provided to demonstrate calculating expected value, variance and standard deviation for random variables.

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Ayesha Mhallawi
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97 views14 pages

Reading Workshop by Slidesgo

The document provides an overview of key concepts related to expected value and variance/standard deviation of random variables. It defines expected value as a weighted average of possible variable values that provides a measure of the central tendency. Variance measures the spread or variability of a distribution, while standard deviation looks at how spread out values are from the mean. Several examples are provided to demonstrate calculating expected value, variance and standard deviation for random variables.

Uploaded by

Ayesha Mhallawi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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LESSON 1.

Expected Value
of Random
Variables
Target Skills

01
Expected Value

02 03
The Expected Value of a Variance and
Function of a Random Standard Deviation of
Variable a Random Variable
Expected Value
One of the most important probabilistic concepts
in statistics is the expected value (mean). The expected
value of the discrete random variable X, denoted by
E(X) or simply µ, is a weighted average of the possible
values of X.
The EV of a random variable gives a measure of
the center of the distribution of the variable. Essentially,
the EV is the long-term average value of the variable.
In statistics and probability, the expected
value is calculated by multiplying each of the
possible
  outcomes by the likelihood each outcome
will occur and then summing all of those values.
Example #1
Let X be the number of workouts in a week
X 0 1 2 3 4
P(x) 0.1 0.15 0.4 0.25 0.1

Find the expected value of the random variable.


Example #2
In a game of chance, a man is paid ₱50 if he gets all heads or all tails when 3 coins are tossed and
he pays ₱30 if either 1 or 2 heads show. What is his expected gain?
Example #3
A company makes electronic gadgets. One out of every 50 gadgets is faulty, but the company
doesn't know which ones are faulty until a buyer complains. Suppose the company makes a $3 profit on
the sale of any working gadget, but suffers a loss of $80 for every faulty gadget because they have to
repair the unit. Check whether the company can expect a profit in the long term.
The Expected Value of a
Function of a Random Variable
 

The expected value of a function of a random variable can be computed as follows.

Let X be a discrete random variable with probability distribution given by


x x1 x2 xn
f(x) = P(X = x) f(x1) f(x2) f(xn)

The expected value of g(X), a function of the discrete random variable X, is


Example #4
If X is the number of points roled with a balanced die, find the expected value of the
 
random variable
Example #5
A used car dealer finds that in any day, the probability of selling no car is 0.4, one car is
0.2, two cars is 0.15, 3 cars is 0.10, 4 cars is 0.08, five cars is 0.06, and six cars is 0.01. Let X =
number of cars sold and let Y = g(X) = 500 + 1,500X representing the salesman’s daily earning.
Finds the salesman’s expected daily earnings.
Variance and Standard
Deviation of a Random Variable
The variance of a discrete random variable X measures the spread, or  
variability, of the distribution, and is defined by

The standard deviation of X is

Standard deviation looks at how spread


out a group of numbers is from the mean,
by looking at the square root of
the variance.
Example #6
Let X be the number of workouts in a week
X 0 1 2 3 4
P(x) 0.1 0.15 0.4 0.25 0.1

Find the variance and standard deviation of the random variable.


Example #7
Five balls numbered 0, 2, 4, 6, and 8 are placed in a bag. After the balls are mixed, one ball is
picked and its number is noted, then it is replaced in the bag. If the experiment is repeated many
times, find the variance and the standard deviation of the numbers on the balls.

P(X=x)
Thank You for
Listening!
CREDITS: This presentation template
was created by Slidesgo, including
icons by Flaticon, and infographics &
images by Freepik

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