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Old 03-21-2007, 09:51 PM
Big_Jim Big_Jim is offline
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Default Re: Simple Variance Question

First one:

x1 = +1.5 with p1 = 0.5
x2 = -1 with p2 = 0.5
E(x) = 0.25

v = p1(x1 - E(x))^2 + p2(x2 - E(x))^2

v = 0.5(1.5 - 0.25)^2 + 0.5(-1-0.25)^2

v = 1.5625

Second one:

x1 = 6 with p1 = 0.16666
x2 = -1 with p2 = 0.83333
E(x) = 0.167

v = p1(x1 - E(x))^2 + p2(x2 - E(x))^2

v = 0.1666(6 - 0.167)^2 + 0.83333(-1 - 0.167)^2

v = 6.8055
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