Nodule 1c: Nathematical

Expectation

NOTES







Stat130
Nrs. Narian T. Reyes
Senior Lecturer
School of Statistics
University of the Philippines
Diliman OC

Nathematical Expectation
!f a discrete random variable X has a
probability mass function P(X = x), then
the expected value of the random
variable X is defined as
!t is also called the mean of a random
variable.
x
( ) ( )
all
E X x P X x = =

Nathematical Expectation
(1,1) (1,2) (1,3) (1,+) (1,5) (1,6)
(2,1) (2,2) (2,3) (2,+) (2,5) (2,6)
(3,1) (3,2) (3,3) (3,+) (3,5) (3,6)
(+,1) (+,2) (+,3) (+,+) (+,5) (+,6)
(5,1) (5,2) (5,3) (5,+) (5,5) (5,6)
(6,1) (6,2) (6,3) (6,+) (6,5) (6,6)
G
R
E
E
N
R E D
1
2
3
+
5
6
1 2 3 + 5 6
2 3 + 5 6 /
3 + 5 6 / 8
+ 5 6 / 8 9
5 6 / 8 9 10
6 / 8 9 10 11
/ 8 9 10 11 12
Find the expected value of the sum of the
spots on the two dice.


Nathematical Expectation
(1,1) (1,2) (1,3) (1,+) (1,5) (1,6)
(2,1) (2,2) (2,3) (2,+) (2,5) (2,6)
(3,1) (3,2) (3,3) (3,+) (3,5) (3,6)
(+,1) (+,2) (+,3) (+,+) (+,5) (+,6)
(5,1) (5,2) (5,3) (5,+) (5,5) (5,6)
(6,1) (6,2) (6,3) (6,+) (6,5) (6,6)
G
R
E
E
N
R E D
1
2
3
+
5
6
1 2 3 + 5 6
2 3 + 5 6 /
3 + 5 6 / 8
+ 5 6 / 8 9
5 6 / 8 9 10
6 / 8 9 10 11
/ 8 9 10 11 12
!n a gambling game, Beth throws a red die and a green die. !f the
sum of the spots on the two dice is a 5, /, or 9 she wins 500 pesos,
and if the outcome is a double dice" (i.e., both dice show the same
number of spots) she wins 800 pesos. For all other outcomes, Beth
loses. How much should she pay to play if the game is fair?


Nathematical Expectation
A coin is tossed four consecutive times. The
random variable X represents the number
of heads in four tosses. Find E(X).


Nathematical Expectation
A coin is tossed 3 times. A gambler pays 30
pesos to play this game and he is paid
80 pesos if all 3 tosses come up with the
same result; for all other outcomes, he loses
his bet. What is his expected net gain (or
loss)?


Nathematical Expectation
A gambler is paid $3 if he draws a jack or
a queen, and is paid $5 if he draws a king
or an ace. For all other outcomes, he loses.
How much should the gambler pay to play
if the game is fair?


Nathematical Expectation
A man wants to insure his sports car for
$50,000. The insurance company estimates
that it will pay for a total loss with probability
0.002; for 50% loss the probability is 0.01; and
for a 25% loss the probability is 0.10. Ignoring
all other partial losses, what premium should
the insurance company charge if it is desired
to have an expected profit of $500?


Nathematical Expectation
A game consists of drawing two chips at
random from an urn that contains five red,
five white, and five blue chips. For each blue
chip drawn, the player wins $1, for each
white chip, he wins $2, but for each red chip,
he loses $3. !f X is the random variable that
represents the gain or loss when playing this
game, what is the expected value of X?


Nathematical Expectation
!f a continuous random variable X has a
probability density function f(x), then the
expected value of the random variable
X is defined as
!t is also called the mean of a random
variable.
( ) ( ) E X x f x dx

Road salt is spread on a road to melt snow
and ice. Suppose that the resulting water has
a temperature of X degrees Celsius, which
has probability density function
Find the expected value of X.
Nathematical Expectation
5 0 ), 2 10 (
25
1
) ( = x x x f


Nathematical Expectation
Find the mean of the random variable Y
whose density function is
3 (1 ) 0 1
( )
1
2 3
2
and zero elsewhere
y y y
f y
y

Properties of Expectation
!f c is a constant, E(c) = c.
!f c is a constant, E(cX) = cE(X)
!f c and d are constants, E(cX + d) = cE(X) +
d
!f X
1
, X
2
, ., X
n
are random variables, and
then
!f X and Y are independent, E(XY) =
E(X).E(Y)
1
n
i
i
Y X
=
=

1
( ) ( )
n
i
i
E Y E X
=
=

Nathematical Expectation
Suppose that a grocery store purchases 5 cartons of
one liter UHT milk at a wholesale price of 20 pesos
per carton and sells the milk (retail) at 2+.50 per
carton. After the expiration date, the unsold milk is
removed from the shelf and the grocer receives a
credit from the distributor equal to three-fourths of
the wholesale price. !f the probability distribution of
X, the number of cartons that are sold from this lot is
given by
Find the expected profit.
15
1
P(X = x)
5 + 3 2 1 0 x
15
3
15
2
15
3 4
15 15
2


Expected values of !ndicator
variables
An absent-minded secretary types n
letters to n people and addresses the n
envelopes. !f she inserts the letters at
random, one in each envelope, find the
expected number of letters that go into
the correct envelopes.


Expected values of !ndicator
variables
Exactly n married couples are living
in a small town. What is the
expected number of intact couples
after m deaths occur among the
couples? Assume that the deaths
occur at random, there are no
divorces, and there are no new
marriages.


Expected values of !ndicator
variables
There are 25 persons in a room.
What is the expected total number of
persons whose birthday is December 25?
What is the expected number of birthdays
that belong only to one student?
What is the expected number of days of a
year that are birthdays of at least two
students?
Assume that birthrates are constant
throughout the year and that each year
has 365 days.


Expected value of a Function
of a Random variable
!f X is a random variable with a given
probability function, and suppose that
u(X) is a function of X, then
( ) ( ) if X is discrete
[ ( )]
( ) ( ) if X is continuous
x
u X P X x
E u X
u x f x dx

When u(X)= X, this expectation is just the mean of X.

Expected value of a Function
of a Random variable
Discrete Case. An urn contains n chips
numbered 1 through n. Assume that the
probability of choosing chip i is equal to
ki, i = 1, 2, ., n. !f one chip is drawn,
Calculate E(1/X), where the random
variable X denotes the number showing
on the chip selected.
No. 3.11.13 page 214


Expected value of a Function
of a Random variable
Continuous Case. Grades on the last Economics
301 exam were not very good. Graphed, their
distribution had a shape similar to the PDF
As a way of curving" the results, the professors
announces that he will replace each person's grade,
Y, with a new grade,
Has the professor's strategy been successful in
raising the class average above 60?
( ) 10 u Y Y =
1
( ) (100 ), 0 100
5000
f y y y =
No. 3.11.10 page 213


Expected value of a Function
of a Random variable
The hypotenuse, Y,
of the isosceles right
triangle shown is a
random variable
having a uniform
distribution on
|6,10|. Calculate the
expected value of
the triangle's area.
No. 3.11.12 page 213
x
y
a
a
Y


Nathematical Expectation
!f X is a continuous random variable
with density function
Find E(X
2
+ X)
1 1
( ) 3 1 5
2 4
0 elsewhere
f x x x =
=


Bivariate Case
!f X,Y are random variables with a given
joint probability function, and suppose
that u(X,Y) is a function of X and Y,
then
( , ) ( , ) if X and Y are discrete
[ ( , )]
( , ) ( , ) if X and Y are continuous
x
u X Y P X x Y y
E u X Y
u x y f x y dx

= =

Bivariate Case (Discrete)
!f the joint probability distribution of X
and Y is given by
Find E|(XY)|
2 2
( )
( , ) for x = 1,2; y =0,1,2
25
x y
P x y
+
=


Bivariate Case (Discrete)
An urn contains n chips numbered 1 to
n. A sample of size 2 is drawn without
replacement. Let the random variable X
be the number of one of the chips and
let Y be the number of the other chip.
Find P(X = x, Y = y) and then find
E(XY)
No. 3.11.1S page 217


Bivariate Case (Continuous)
Commercial kerosene is stocked in a bulk
tank at the beginning of each day. Because
of limited supplies, the proportion y of the
capacity of the tank available for sale and
the proportion x of the capacity of the tank
actually sold during the day are jointly
related by the probability density function
Find E(X+Y)
( , ) 2, 0 1 f x y x y =


Bivariate Case (Continuous)
A candy company distributes boxes of
chocolates with a mixture of creams, toffees,
and cordials. Suppose that the weight of each
box is 1 kilogram, but the individual weights
of the creams, toffees, and cordials vary from
box to box. For a randomly selected box, let
X and Y represent the weights of the creams
and the toffees, respectively, and suppose
that the joint density function of these
variables is given by
Find E(XY)
24 0 1, 0 1, 1
( , )
0
xy x y x y
f x y
elsewhere
+
=

Bivariate Case (Continuous)
!n producing gallium-arsenide microchips, it is know
that the ratio between gallium and arsenide is
independent of producing a high percentage of
workable wafers, which are the main building blocks
of microchips. Let X denote the ratio of gallium to
arsenide and Y denote the percentage of workable
microwafers retrieved during a 1-hour period. The
joint density of X and Y is
(a) Find the marginal density of X.
(b) Find the marginal density of Y.
(c) Find the expected value E(XY) - E(X)E(Y)
2
(1 3 )
0 2, 0 1
( , )
4
0
x y
x y
f x y
elsewhere
+
< < < <
=

Bivariate Case (Continuous)
Suppose that X and Y are independent
random variables with density functions
Find E(Y/X)
3
8
( ) , 2
( ) 2 , 0 1
f x x
x
g y y y
= >
= < <


Bivariate Case (Continuous)
Suppose that X and Y have the joint
density function
!f find E(R)
0 1, 0 1
( , )
0
x y x y
f x y
elsewhere
+ < < < <
=

1 1 1
R X Y
= +


Some Special Nathematical
Expectations
The Variance. When u(X)= (X - )
2
2
2
2
( ) ( ) if X is discrete
( ) ( ) if X is continuous
x
x
x
x P X x
x f x dx

The variance
Karen is interested in two games, Bonita and Keno.
To play Bonita, she buys a ticket for $1 and selects a
number from 1 to 100. A ball is drawn at random
from a box of 100 balls numbered 1 to 100. !f the
ball drawn matched the number chosen by Karen,
she wins $/5; otherwise, she loses. To play Keno,
Karen bets $1 on a single number that has a 25
chance to win. !f she wins, they will give her dollar
back plus two dollars more; otherwise, they keep the
dollar. Let B and K be the net amounts that Karen
gains or losses in one play of Bonita and Keno,
respectively. Find the mean and variance of Karen's
expected monetary net gain (or less) for each play
of Bonita and Keno.


variance of a Random variable
Discrete Case. Let the discrete
random variable X have the probability
mass function
Calculate the variance E|(X - )
2
| using
the alternative formula.
1/6 0 1/2 1/3 P(X)
3 2 1 0 x


variance of a Random variable
Find the mean and variance of the
random variable Y whose density function
is
3 (1 ) 0 1
( )
1
2 3
2
and zero elsewhere
y y y
f y
y

Some Special Nathematical
Expectations
The Standard Deviation. !t is the
square root of the variance.
2
2
( ) ( ) if X is discrete
( ) ( ) if X is continuous
x
x
x
x P X x
x f x dx

Properties of the variance
!f c is a constant, var(c) = 0.
!f c is a constant, var(cX) = c
2
var(X)
!f c and d are constants,
var(cX + d) = c
2
var(X)
!f X and Y are independent,
var(X Y) = var (X) var (Y)
var(aX bY) = a
2
var(X) + b
2
var(Y)


Properties of the variance
A mason is contracted to build a patio retaining wall.
Plans call for the base of the wall to be a row of 50
10-inch bricks, each separated by inch thick
mortar. Suppose that the bricks used are randomly
chosen from a population of bricks whose mean
length is 10 inches and whose standard deviation is
1/32 inch. Also, suppose that the mason, on the
average, will make the mortar inch thick, but the
actual dimension varies from brick to brick, the
standard deviation of the thicknesses being 1/16
inch. What is the standard deviation of L, the length
of the first row of the wall?
No. 3.13.4 page 224