BS Lect 11
BS Lect 11
Topics to Cover:
Random Variables
Probability Distributions
Expected Value of a Random Variable
Variance and standard deviation of a
Random Variable
Learning Objectives
At the completion of this chapter, you should be
able to:
Identify random variables as either Discrete or
Continuous
Calculate probabilities of a random variable from a
probability distribution/density function
Calculate the expected value and variance of a
random variable
Calculate the expected value and variance from a
function of a random variable
Random Variables
A random variable is a variable that assumes numerical
values associated with the random outcomes of an
experiment, where one (and only one) numerical value is
assigned to each sample point.
Random
Variables
Discrete Continuous
Random Variable Random Variable
Examples of a Discrete Random
Variable
The number of sales made by a salesperson in a given
week: x = 0, 1, 2,. ..
The number of consumers in a sample of 500 who favour
a particular product over all competitors: x = 0, 1,
2,. . . , 500
The number of bids received in a bond offering: x=
0, 1, 2,. . .
The number of errors on a page of an accountant's
ledger: x = 0, 1, 2,. . .
The number of customers waiting to be served in a
restaurant at a particular time: x = 0, 1, 2,. . .
Other Examples
Can only assume a countable number of values
Examples:
0.50
H H 0.25
0 1 2 X
Example 5.1
X 0 1 2 3 Total
Quick Exercise
1.What is the probability of getting less that 3 heads?
2.What is the probability of getting more than 1 head?
Expected Value of X
Example
Expected Value (or mean) of a discrete
distribution (Weighted Average)
N
E(X) Xi P( Xi )
i1
X P(X)
Example: Toss 2 coins, 0 0.25
X = # of heads, 1 0.50
E ( X 2 ) [ E ( X )]2
n n
[ X i2 P( X i )] [ X i P( X i )]2
i 1 i 1
where:
E(X) = Expected value of the discrete random variable X
Xi = the ith outcome of X
P(Xi) = Probability of the ith occurrence of X
Example
σ [X E(X)] P(X )
i
2
i
E(X) = 1.19