For more information, please see full course syllabus of Statistics

For more information, please see full course syllabus of Statistics

### Expected Value & Variance of Probability Distributions

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

- Intro
- Roadmap
- Discrete vs. Continuous Random Variables
- Mean and Variance Review
- Mean: Sample, Population, and Probability Distribution
- Variance: Sample, Population, and Probability Distribution
- Example Situation
- Some Special Cases…
- Linear Transformations
- n Independent Values of X
- Compare These Two Situations
- Two Random Variables, X and Y
- Example 1: Expected Value & Variance of Probability Distributions
- Example 2: Expected Values & Standard Deviation
- Example 3: Expected Winnings and Standard Deviation

- Intro 0:00
- Roadmap 0:06
- Roadmap
- Discrete vs. Continuous Random Variables 1:04
- Discrete vs. Continuous Random Variables
- Mean and Variance Review 4:44
- Mean: Sample, Population, and Probability Distribution
- Variance: Sample, Population, and Probability Distribution
- Example Situation 14:10
- Example Situation
- Some Special Cases… 16:13
- Some Special Cases…
- Linear Transformations 19:22
- Linear Transformations
- What Happens to Mean and Variance of the Probability Distribution?
- n Independent Values of X 25:38
- n Independent Values of X
- Compare These Two Situations 30:56
- Compare These Two Situations
- Two Random Variables, X and Y 32:02
- Two Random Variables, X and Y
- Example 1: Expected Value & Variance of Probability Distributions 35:35
- Example 2: Expected Values & Standard Deviation 44:17
- Example 3: Expected Winnings and Standard Deviation 48:18

### General Statistics Online Course

### Transcription: Expected Value & Variance of Probability Distributions

*Hi and welcome to www.educator.com.*0000

*We are going to talk about expected value and variance of probability distribution.*0001

*Just a brief recap of discrete versus continuous random variable is *0005

*you need to understand random variable in order for us to move on to understanding expected value and variance.*0016

*Then we are going to do a brief mean and variance review to just think about all the different kinds of mean and variance we have learned so far.*0023

*We are going to talk about the new versions of mean and variance, mean and variance probability distribution.*0033

*We are going to talk about three special situations, linear transformations of the random variable x and what happens to mean and variance, *0042

*the sum of n independent values of x and the sum of difference of independent values of X and Y.*0050

*Drawn from two different random variable pools.*0059

*There are discrete versus continuous random variables so far we have been talking about random variable like x.*0062

*x could be sum of 2 die, x could be the sum of 2 TV show, x could just be something simple like number of people in a room.*0073

*It does not really matter what x is.*0118

*X is whatever random variable and then whatever that random variable is you have the probability of those x in your probability distribution. *0120

*That is what we have been looking at are discrete random variable. *0130

*These are called discrete, their numbers like when we have the sum of two die, their numbers like 2, 12 *0137

*but they are discrete they are not continuous because having 1.7 as an expected value that means that if we had a distribution that look at 1, 2, 3, 4 these are our x.*0147

*Having 1.7 although there is meaning it is like on average like somewhere around here for our distribution you are getting 1.7.*0170

*Is it not possible to get that 1.7.*0178

*Let us say we have the sum of two die, let us say that ended up an expected value of uneven set of two die and end up being 4.7.*0184

*That is a perfectly fine expected value but can you ever roll an actual sum of 4.7, *0197

*no that is impossible and because of that those are called discrete random variable. *0206

*There are bins that you have to follow and those are the only possible values for that random variable.*0212

*Now random variables like height are continuous because in something like average height or the sum of heights.*0222

*It is not that I have particular values that you can have.*0232

*You could have all kinds of different values.*0236

*It will be less likely than others but there are infinite number of possibilities in between 2 discrete sums.*0239

*We are only trying to be talking about discrete random variable and the probability distributions. *0248

*So far of discrete random variables.*0257

*All the stuff we have learned about expected value and all that stuff, it only works for discrete random variable. *0267

*Later on will learn about how to deal with continuous random variables and that can be exciting if it can open up all the world for us.*0274

*Given that, now we could do a brief review of mean and variance and we talk about samples, population and we are adding on probability distribution. *0283

*With samples remember the mean is going to be symbolized by X bar while in a population the mean is symbolized by mu.*0296

*Here the mean is symbolized by the expected value of x or mu sub x.*0304

*First off, you know that the symbols are different, but the sample and population what you end up having to do is summing all the x.*0313

*I=1 to n then dividing by how many number you have.*0324

*In populations, what you end up doing is basically the same thing except you just change the notation slightly *0339

*so that it reflects that you are doing this for the entire population, not just your little subset sample. *0348

*Here we have x sub i just like before but instead i going from 1 to n, we have from 1 to N and divide by N and the number of all different people in your population.*0357

*At first glance you might think what we learned about expected value might look a little bit different to you *0377

*because you have the sum of all these different values of all these different x times the probability of those x.*0385

*you might think we are not like adding them up and dividing by n, but in fact we are because let us unpack the p(x).*0396

*If you think about the probability of X, think about double-clicking on it and we open it up what is actually inside?*0405

*What is actually inside is the number of x, the number of times where you will get x out the total frequency.*0415

*We are looking at something divided by the total frequency of however many it is but we are also weighting it by the number of x.*0444

*Before we had things like 1 out of 36, there are 36 possible outcome and the number of times where you will get 1-1 is just 1out of 36.*0456

*We can change that into a probability or we could unpack it as the number of times you will get x out of the total frequency, the total number of outcomes.*0470

*It will be a little bit more transparent. *0490

*In that way we have in your weighting x by however frequent it is and dividing by the total.*0493

*That is very similar to our notion of mean like all these x divide by some total number of something.*0503

*In that way we have that idea still present here we just have to unpack it a little.*0513

*Let us talk about variance.*0518

*Before what we want from variance was something like average distance away from the mean.*0521

*We want these points and we want to know through the average distance away from the mean and we could not just look at deviations away from the mean *0530

*because when you have x - X bar sometimes we positive and sometimes the only negative, so that is adding up to 0.*0539

*We will square everything right.*0548

*Here and in sample the variance we called s ^{2} actually.*0553

*Here we would call this Sigma ^{2} and let us start here.*0562

*The Sigma ^{2} what we are going to do is just take all of the difference squared deviations away from the mean.*0568

*Take all these x and get all their squared deviations away from the mean, and then divide by N, how many x we have.*0580

*It is the same i from 1 to N.*0595

*When we looked at variance and more importantly standard deviation, which is going to be the square root of the things, *0598

*what we wanted was the same idea, so squared deviation and this time we use x bar ^{2}.*0610

*Now we need to do a little bit of a correction and so we divide by n-1.*0620

*In order to get standard deviation we just square root both sides and we get as square roots of x sub i – x bar ^{2} over n -1.*0629

*You could also square that square root both sides here and we get Sigma equals the square root of sum of squared deviation away from mu this time over n.*0649

*Let us sample population, but now let us talk about in probability distribution. *0669

*Just like how here you see how mu is like population because probability distribution theoretical, so we use those Greek letters.*0678

*Here we will use sigma, square that for variance but we will also put that x there.*0694

*Instead of expected value we call this variance.*0702

*You could write it as bar x or sigma sub x ^{2}.*0705

*If you break this down you could see the similarity but once again I will put it in the probability form where now you are summing the squared deviation.*0714

*It is x - and imagine what you would pick here, you would not put mu or X bar, you would put it corresponding mean, which is mu sub x ^{2} times the P(x).*0724

*You multiply all these together.*0755

*It is the same thing if you break it apart you could see sort of this piece and this piece.*0757

*This piece is very similar here and we are using probability to weight each x and then divided by the total number of outcomes.*0764

*You could see this part is very similar to these parts and once again you could break down p(x) *0775

*to be in a number of outcomes that look like X over the total number of outcomes.*0786

*You could break it down, but here I'm going to write the standard deviation form.*0794

*All you do is square root both sides, so it is not just Sigma, but Sigma sub x will be equal to the square root of this whole thing.*0800

*Sum of X – mu sub x ^{2} × p(x).*0812

*You can see that there are some real close similarities, but there are some subtle differences now too and I should say that still for discrete random variable.*0824

*This is in the case where X is the discrete variable.*0844

*Let us see some example situation.*0849

*We have seen this situation in the lesson previous.*0854

*At the state fair you can play fish for cash, a game of chance that cost $1 to play.*0857

*You are going to fish out a card that have dollar amount that you of one from a giant fishbowl and here is the probability distribution *0861

*and all these different potential winnings and the probability of those winnings.*0866

*I put those here and before we look at how to find expected value and now we know how to find the standard deviation of these winnings.*0875

*We know the formula that we could use and we could think about what the idea is.*0892

*If expected value, if this is roughly the mean of the probability distribution *0895

*and that is over time, over many, many cases this will be the mean over the mean of winning.*0908

*We can think about what variance of x means.*0921

*That means what is the spread around that mean?*0926

*If we have large variance it means that there is lots of spread around it.*0930

*There are small variance that is very consistent around that means right.*0937

*You can think of this as the spread of the probability distribution, the mean or center.*0941

*We are getting at these same concepts again like shape, center, spread.*0951

*Here we have center and spread but now we are not just talking about distribution we are talking specifically about probability distribution.*0957

*We could find the variance of this probability distribution if we wanted to.*0963

*Let us talk about some special cases.*0973

*There are going to be some cases where you have a very similar setup to the ones that we have just discussed where you know you need a probability distribution.*0977

*There are going to be some subtle changes.*0988

*One example is when you have some random variable, like winnings. *0992

*But these winnings or this random variable is transformed linearly, somehow.*0999

*Remember linear transformations are whenever you add a constant or subtract a constant either way, or if you multiply or divide by constant.*1005

*Those are both linear transformation and doing some combination of the two that it still linear transformation.*1016

*An example situation might be something like this.*1023

*You have that same fish for cash game, but they have a special day where they have a promotion *1027

*where whatever you get you pick at random you get triple the value for that day. *1032

*What would be the expected value of that game?*1036

*All information you need is actually there.*1040

*We are going to talk about how to find expected value and variance for this kind of situation.*1044

*Another special case is if you have an independent value of x and their sum together.*1050

*For instance if you play that fish for cash game, but you buy 3 ticket, you played three times in a row and so you pick 3 ticket at random and their values are summed.*1057

*In that case you have an independent values, n(3) independent events of this random variable, winnings *1067

*and their sum together and you want to know what expected value should I have for this kind of situation and what is the variance?*1085

*We are going to talk about that.*1097

*And finally the last special case for you to talk about is when you have an independent value from x and another one from y *1099

*and then you either sum one together or subtract one from the other.*1109

*Some kind of combination of that.*1114

*In this case it might be something like there is 2 fish for cash booths, it was 2 games that are similar *1116

*and you buy a ticket from one booth and you buy ticket from another booth.*1124

*And you know the probability distributions of both X and Y separately. *1129

*What is expected value of this sum together or are subtracted from each other?*1134

*What is the variance?*1140

*These are the three different kinds of special cases that we are able to figure out just from having all of the same information we have had so far.*1144

*We could just do a little bit of reasoning around these issues and I will come to some shortcuts.*1154

*First let us talk about linear transformation. *1163

*A linear transformation is whenever you have some x, so this is my old X, my old winnings value and you might multiply or divide it by some constant. *1166

*We will call it d here, it is just traditionally called d or we might add or subtract a constant here.*1176

*I just use that addition sign because it could always be that c is negative.*1187

*In order to get my mu x I multiply by something, I divided by something, I add something to it.*1191

*And then I get my new x as long as C and D are the same for every single value of X it is considered a linear transformation.*1203

*Given these kinds of linear transformations, what happens to the mean and variance of the probability distribution?*1212

*If you think about it, let us think about the concrete case of I picked a ticket and I get three times the value.*1220

*You would expect that the mean which shift upwards and now you can win that money even though you spend a dollar you could win more money.*1229

*If we need this value smaller somehow like what they are either severely for the game, *1243

*but let us say whatever to get you pulled out you would only receive half for that value but it could happen. *1253

*What would happen to the mean there?*1267

*The mean should probably shift down a little bit.*1271

*When you look at the mu, here we have old mu, this is old mu, old expected value.*1274

*What should we do to this old expected value to reflect the changes that are going on in our underlying x, our underlying value?*1289

*Here is what we do, in order to find the new mu and we will call this mu(c + dx) or we could have also called it mu(x mu).*1307

*To find this new one, what we would still actually sort of simple.*1321

*We will do the same transformation to the old mu.*1327

*Whatever you did to the individual values, the individual x you do to the mu and you got your new mu.*1332

*That is a nice way about the mu directly reflects the changes to the transformations to that individual values that they came from.*1346

*How about variance?*1357

*The old variance looks just like this, this is old bar x.*1359

*What should we do to all variance in order to transform it into the new variance?*1375

*Let me put a line here so that we can keep this separate.*1382

*Here you are not going to add c necessarily because adding a constant does not necessarily make the spread wider or anything like that.*1388

*We can now actually ignore the constant but only do now is let me write the new version.*1402

*Here, the new version has C + dx or you could think of that as Sigma ^{2} x mu.*1412

*The mu variance of x would now be it could ignore the c part, all we use is the D.*1423

*This is the old variance and so here we multiply by d ^{2} and so what we are seeing is that the variance for actual of d *1433

*is no matter whether d is negative or positive the variance gets larger when you do these linear transformation multiplicative transformation of your random variable.*1451

*Just to round it out, if you wanted to know standard deviation, so if you wanted C+ dX, this is standard deviation it is not squared anymore.*1471

*If you wanted that you would just square this and that.*1485

*That would just be d but the positive version of d, absolute value of d × sigma.*1488

*What we see is roughly the same idea as here, except everything has been squared root in.*1500

*When you transformation are pretty straightforward. *1514

*When it is the new mu you do the same transformation.*1520

*When it is variance, the new variance you multiplied by a d ^{2} and you ignore the c. *1524

*You do not need c in order to look at spread.*1535

*What if we have n independent values of x?*1538

*This is the case where picking out let us say three separate independent tickets/*1546

*Let us say there is like 1 million tickets in there.*1555

*We can almost treat each picking of the ticket as an independent event.*1558

*We have n independent value of X, the same random variable.*1564

*The same goal of winning and what happens to the mu sub x and sigma sub x ^{2} when we add these three separate values together.*1571

*Let us think about this mu sub x, this is the expected value of just x by itself.*1586

*We do not know which one, the first one it is just the expected value of x.*1601

*Presumably each independent event has the same expected value of x.*1614

*The first one, second one, third one.*1621

*When you add them together, it is sort of like here is the average and let us say you take it out three different things *1624

*and you add them together it will be like multiplying the average by three to get an estimate of your new mu.*1633

*Here what is the expected value of now it is not just x but it is x1 + x2 + x3 and assuming that *1640

*these are all independent but that will just be n however many times it is it could be 4, 5 tickets.*1661

*N × my expected value for each event.*1671

*Mu sub x and we could have written as mu sub x + mu sub x + mu sub x, but in this way we are just noting that it is however many independent values you have.*1678

*It does not have to be 3, it could be 4, it could be 10, could be 4.5, it does not matter.*1701

*We could just put it up as n.*1708

*That makes life easier.*1712

*It is a little bit of jump but it is very reasonable.*1714

*We can think about what is the variance of this x1 + x2 + x3?*1718

*Let us think about this.*1729

*Here we did not add any constant and if it increases by this match will probably just increase the variance as well.*1733

*But not increase the variance as much as when you have one value multiplied by three here were adding three separate values that roughly have the same variance.*1747

*This should probably just be something like n × Sigma sub x ^{2}.*1760

*It is almost like for each of these are just adding in that variance.*1768

*It is just n × variance and then when you look at the standard deviation, once you know this it is a very simple if the square root of n × the old standard deviation.*1774

*In this one is actually a little bit simpler to reason through because you can think of it as they are adding in these values.*1797

*You add in the expected value and you add in the variance.*1805

*It is very straightforward.*1813

*Notice that here, this expected value is very similar to if you had taken a card and multiply that by three.*1816

*The expected value is the same but the variance is actually slightly different.*1833

*Here the variance is a little bit less because before it was d ^{2} but here it is just n.*1839

*The variance is a little bit less in this case, than in the case of linear transformation.*1846

*I want to make that little bit more clear.*1854

*Here is the x are transforms linearly but here you are not transforming the x themselves.*1861

*You are adding together three independent events and because of that here you can have less increase in variance.*1869

*Here are the more of the increase in variance and so because of that, although this looks very similar *1878

*because it is whatever you however many times you get to put it back there.*1886

*Here you square that d and here you just have n times but notice that both here and here the expected value are the same because here c is 0 and D is going to be 3.*1895

*Here n is 3 so the expected values are trying to be the same.*1908

*Let us go on to a situation where you have 2 random variable.*1918

*We already have been looking at one random variable so far, but now we have 2 random variables.*1929

*You can think of them like 2 separate fishbowls and each has a different probability distribution of winnings.*1934

*Each of them have these two distributions and I want to know if I take 1 from here and 1 from here what is the expected value over time of that sum or the difference?*1952

*It also works for difference right.*1968

*This one is pretty straightforward.*1972

*If you have mu(x) + y because I am adding together 1 from x and 1 from y *1974

*the expected value of this new sum is going to be the expected value of x + expected value of y.*1982

*And if I wanted to do x – y, I want to come it in that way, as you could guess mu sub x – mu sub y.*1991

*It is the difference of those expected value and the way you could think about it like this is when you pick out x, the expected value of that x is mu sub x.*2008

*That is why they call it expected value. *2016

*Instead of putting in just x we could plug-in for the expected value of x and here instead of putting in y *2018

*we could plug in the expected value of y and that is our most high probability estimate of what x + y is.*2032

*The same when subtracting X and Y but variance is little bit different because variance does not necessarily work in that parallel way.*2041

*Here we have Sigma( x + y) ^{2} so the variance of X + y that is pretty straight forward.*2053

*It is the variance of 1 + the variance of the other, straightforward.*2066

*This is sort of the unexpected variance and it makes sense.*2072

*When you have x - y you want to subtract the variance. *2079

*You are actually reducing variance by doing this transformation.*2085

*The variance actually will be the same as up here because no matter what you are going from two different pools, *2090

*two different distributions or 2 different sources of that randomness.*2097

*That spread is only going to increase. *2105

*These two are the same, but this is only the case all of this only works if x and y are independent events.*2107

*If they depend on each other in any way that you can count on this.*2126

*Let us get into some examples.*2133

*Here is example 1, at the state fair you can play fish for cash, a game of chance cost one dollar to play.*2140

*You will fish on a card that had a dollar amount that you have one from the giant fishbowl.*2146

*They are having a special where you draw a ticket they will triple the value printed on it. *2152

*What is expected value and variance of the promotional game?*2157

*If you download the example and you go to example 1, I put the original game on here with all the winnings, including 0 and the probability of those winnings.*2161

*Here we want to sum these up to make sure it adds up to 1 so that we know that our probably distribution is complete. *2176

*Let us talk about just plain old regular expected value of the old original game.*2185

*I just multiplied x by the p(x).*2193

*It is the contribution of each value of this random variable and then expected value in total is just that sum.*2199

*This we have done before.*2215

*The reason I want to do this is I want to show you how to calculate the variance.*2217

*Here I have standard deviation.*2224

*Whatever we have here we have to square root it.*2227

*Let me just put a mu to myself here because I am going to need to square root it.*2230

*Let us think about how to calculate variance here.*2234

*This is the expected value, the mean but what is the spread around that mean.*2239

*What we are going to have to know what x is over here, winnings – the mean, the expected value squared.*2245

*The squared deviations away from the expected value.*2262

*To all of those I am going to multiply, let me put this in a parenthesis.*2266

*I am going to multiply the probability of that particular x.*2282

*Here is the squared deviation and our probability tells how much should these deviations count.*2288

*I will just copy and paste that all the way down.*2305

*What we do here is we need to square root the sum of all of these.*2311

*That is the spread around the mean.*2316

*Let us think about this, if our expected values is $.60, and the squared of that is around $4 because it is standard deviation.*2334

*That means if we go to the negative side it is going to be negative numbers.*2346

*You cannot necessarily pull the cards that says give me $3.*2351

*That does not make any sense.*2360

*What we are seeing is this number is large because you did not pull by this big value.*2362

*That 900 number.*2370

*This is saying it is probably skewed on the right side towards the larger numbers.*2373

*There is a long tail there.*2381

*Let us get on to our problem.*2383

*Now this is the problem we are talking about the new probability of winning.*2386

*Here is the old probability of winnings.*2390

*Actually, the probabilities do not change.*2394

*Your chance of drawing a 0 card remains the same, but the value of those winnings have changed since it is now 0 × 3 which is still 0 unfortunately.*2397

*All these other ones you can now win up to $2700 in this game.*2412

*This game is a good deal. *2419

*Well, let us see.*2421

*Let us find the expected value. *2423

*Here we are no longer using the old x that we are using the new x and this new X is 3x.*2425

*Our d is 3.*2433

*The new winnings × the probability of those new winnings.*2437

*I am just going to copy and paste that all the way down and then sum that up and get a $1.80. *2443

*This new game is a better deal because overtime iIf you spent for every dollar you spend you get $1.80 back.*2457

*Not on any particular draw of a card will you get $1.80, but if you play this game a hundred times and spend $100 on average you will get an extra $8.*2465

*Let us also see if we can find that using our shortcut.*2480

*Before it was mu sub x and it said okay if you want to transform all your values by multiplying it by d and all you do is you multiply your old expected value like d.*2488

*If that is the case yes it is.*2508

*I could do this old expected value times 3 and get that same value.*2510

*You could use that shortcut. *2518

*Now let us calculate standard deviation.*2522

*We know that in order to calculate variance, it is d ^{2} times variance, but here we have standard deviation, it is just d times standard deviation. *2525

*Let us see if that works.*2540

*D × stdev we should get $12.2 and the variance has gotten bigger because the spread got bigger.*2540

*Now you can win all the way up to $2700 or 0.*2550

*We increase that spread.*2556

*Great, but we can also check and see if this works sort of conceptually.*2558

*Here we are going to work to take the value of the new winnings - this expected value ^{2}.*2565

*We want to lock this one down because our expected value will change and wanted to take all of take that square deviation and multiply it by the probability.*2580

*We could just copy and paste this all the way down. *2600

*Here remember we need to find a standard deviation, rather than variance.*2606

*We need to square root the sum of all of these.*2611

*You can think of these multiplying my p but I already done the division for you.*2617

*And we get about 1212.*2627

*If we had looked at this in a larger with more decimal point we would see the exact number. *2633

*Why not, it works, our shortcuts work and also the regular old formula for variance also works.*2644

*Example 2, suppose you buy three tickets from fish for cash what is expected value of your total winnings?*2652

*What about the standard deviation and which standard deviation is higher playing the game three times by tripling the value of one play.*2666

*We know that this is the situation where we get three independent events and then we add them together.*2678

*That is like estimating the first x we estimate that to be expected value. *2687

*The second x we estimate that to be the expected value. *2693

*The third x, we expect that to be the value.*2697

*That is going to be the expected value, the mu (x1 + x2 + x3).*2700

*I'm just going to shorten that to be mu(sum), whatever the sum is.*2719

*It going to be n times the old expected value.*2723

*Previously our expected value was $.60 and our n is 3, this is $1.80 and that is the same as before.*2731

*We have established that already these two situations have very similar expected value.*2745

*What about standard deviation. *2751

*Well, the standard deviation of sum that is going to be my mu(x) is the square root of n times whatever the standard deviation was before.*2754

*That is going to be the square root of 3 times and let us look up what our standard deviation would be $4.04.*2774

*Let me just use the line of my Excel here just to calculate that the square root of 3, you could feel free to use a calculator times 4.04 and that is going to be 6.98.*2790

*We saw that in the previous it is tripling the value on, that standard deviation of 3x that was $12.12.*2818

*Which standard deviation is higher?*2837

*This one or this one?*2840

*Well, it is certainly the one. *2842

*Why is that? We expanded the values right of the x now you win up to $2700 in one play and the chance of that has not changed.*2844

*Whereas here if you pick out three cards there is a very slim chance you get 3 900 cards.*2861

*That probability way out there, it is not likely in this case it. *2871

*It is more likely than in the situation, so it makes sense that here we would stretched out the values.*2878

*We have a stretch of values as much, but notably we have increased the standard deviation from the original game.*2885

*Example 3, these are two booths own by Amos and body with similar games to the fish for cash game.*2897

*Amos booth has an expected value of .50 with the standard deviation of .25.*2906

*Bobbie’s booth has an expected value of .75 and a standard deviation of .32, not counting the cost of the ticket, which I presume is the dollar.*2913

*What are your total expected winnings and what is the standard deviation?*2923

*I am going to say where your total expected winnings if you play each game ones so that you have to add together those 2.*2928

*Let me make sure I have the Excel handy for later.*2945

*Let us think about this first.*2956

*What we want as we have bodies that Amos game and Bobbie’s game and we trigger winnings from both of them and add them together.*2959

*We have A + B and we want to know what is expected value of A + B.*2970

*We know the mu (A+ B) = mu(A) + mu(B).*2977

*We have mu(A and B).*2985

*Expected value of Amos booth is 50% and expected value of Bonnie’s booth is .75 and we add that together the new mu is $1.25.*2987

*That is good news only if you just count the fact that you spent $2 to win $1.25.*3004

*Not good for you.*3015

*It is good for Amos and Bobby.*3017

*What is the standard deviation of this?*3019

*We actually do not know directly the standard deviation formula .*3022

*We could actually derive it from what we do know.*3031

*We do know variance.*3033

*We know the variance if we add together the variance of A, if we want the variance of A and B *3035

*added together then all we do is add the variance of A to the variance of B.*3046

*Keep writing A instead of sigma.*3052

*It is very similar.*3060

*This is our formula for variance, but it is asking for standard deviation.*3062

*We might just square root these sides and we know these values already. *3070

*We do not know standard deviation and we do not know variance.*3077

*As we only know the standard deviation but we know how to get variance.*3084

*You will have to take the square root of Amos standard deviation.*3087

*In order to find variance and I have to square that.*3096

*I do not need this parenthesis anymore.*3104

*I will just square that first and add that to Bobby's standard deviation ^{2} in order to get variance.*3111

*The reason we have to do this first is that the square root of this sum is not going to be .25 +.32.*3124

*There is order of operations.*3134

*We have to do the squares first before adding them together and if you do not that is going to change the value.*3137

*Let us see what we get.*3146

*I am just going to use one of these rows to help me out here. *3149

*Just calculate something.*3154

*Here I am going to write square root of .25 ^{2} + .32^{2} and the nice thing is that Excel knows order of operations.*3156

*Excel know that it need to do the exponents first and then add them together then square root of all of that sum.*3176

*We get .406 that is our new standard deviation.*3195

*It is larger than the old one and that makes sense because we are increasing variance because we are adding things together. *3207

0 answers

Post by Carol Taylor on September 4, 2015

I need help with this question N=6 scores has EX =48 What is the population mean?

0 answers

Post by Brijesh Bolar on August 17, 2012

I like the double click analogy you have used to unpack an equation.