Re: Having trouble with a variance calculation, NLHE
[ QUOTE ]
Anyway, the variance formula is:
10p((A - pA)^2) + 10(1-p)((0-pA)^2)
...
10p(A^2 - 2pA^2 + p^2A^2) + (10 - 10p)(<font color="red">-</font>p^2A^2)
[/ QUOTE ]
That final minus sign (in red) is wrong. This leads to a massive simplification and
V = 10*p*(1-p)*A^2
which is obvious since sqrt[10*p*(1-p)] is the standard deviation of the binomial distribution of the number of hands won out of N=10, sqrt(Npq), and since we win A for each hand won, multiplying this by A gives the standard deviation of the amount won, and squaring gives the variance of the amount won.
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