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Quick variance problem

  • 12-05-2008 4:39pm
    #1
    Closed Accounts Posts: 48


    Can anyone tell me if the variance answers here are correct? i keep getting different answers to those ones.

    Question 5: Sales per day for a product are estimated as follows based on past records.
    Daily Sales(X) Probability
    10 .2
    11 .4
    12 .3
    13 .1
    Obtain the mean and variance of the daily sales. [answer: 11.3 and 0.81]
    If the profit can be described by the equation Profit = -15 + 4.5X
    What is the expected daily profit? What is the variance of the daily profit? [answer: 35.85, 16.4]

    i keep getting variance for the first part as 1.29 instead of 0.81 and 26.12 instead of 16.4 for the second part. Thanks for any help.


Comments

  • Registered Users, Registered Users 2 Posts: 2,481 ✭✭✭Fremen


    The formula is var(x) = E[x^2] - (E[x])^2

    So for the first part, your calculation is

    (100*.2 + 121*.4 +144*.3 + 169*.1) - 11.3*11.3

    which gives the required answer.


  • Closed Accounts Posts: 48 qwertykeyboards


    Thanks Fremen!


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