E120

Homework 7 Solutions
1. (a) E[Z] = 0 0.1 + 1 0.3 + 2 0.3 + 3 0.1 + 4 0.2 = 2
(b) E [Z E[Z]] = 0
(c) E[Z 2 ] = 02 0.1 + 12 0.3 + 22 0.3 + 32 0.1 + 42 0.2 = 5.6
(d) E[Z 3 ] = 03 0.1 + 13 0.3 + 23 0.3 + 33 0.1 + 43 0.2 = 18.2
(e) E[sin Z + 2Z] = E[sin Z] + 2E[Z] = sin 0 0.1 + sin 1 0.3 + sin 2 0.3 + sin 3 0.1 +
sin 4 0.2 + 2 2 = 4.3879
(f) E[(Z E[Z])2 ] = E[Z 2 ] E[Z]2 = 5.6 22 = 1.6 = Var(Z)
2. (a) Var[3 X] = Var[X] = Var[X] = 1
(b) Var[2X + 4] = Var[2X] = 22 Var[X] = 4
(c) Var[X Y ] = Var[X]+Var[Y ]+2Cov(X, Y ) = 1+1+2(1)Cov(X, Y ) = 0.
(d) Cov(X, X) = Var[X] = 1
(e) Cov(X, X + Y ) = Cov(X, X) + Cov(X, Y ) = 2
(f) Var[4X +Y 7] = Var[4X +Y ] = Var[4X]+Var[Y ]+2Cov(4X, Y ) = 42 Var[X]+
Var[Y ] + 2 4 Cov(X, Y ) = 25
3. (a)
E[X] = 1

3
1
1
+0 =
4
4
4

(b)
Var(Z) = E[Z 2 ] (E[Z])2
= 1/2 1/4 = 1/4
(c)
Cov(X, Y ) = E[XY ] E[X]E[Y ]
= 0 1/16 = 1/16
Cov(Y, Z) = E[Y Z] E[Y ]E[Z]
= 0 1/8 = 1/8
(d)
Var(X + Y + Z) = Var(1) = 0

4. (a)
E[X] = 8
=

2
16
1
17
+1
10
1
36
36
36
36

5
36
E[Y ] = E[X] =

5
36

(b)
Var(X) = E[X 2 ] (E[X])2
2
16
1
17
5
= 64
+1
+ 100
+1
( )2
36
36
36
36
36
9371
=
7.23
1296
Var(Y ) = Var(X) = Var(X) =

9371
7.23
1296

(c)
Cov(X, Y ) = Cov(X, X) = Var(X) =

9371
7.23
1296

5. For any given dice thrown, the probability of winning is 61 . Let X be the number of


k 5
3k
dice that match the players chosen number. Then Pr[X = k] = k3 16
for
6
1
k = 0, 1, 2, 3. Note that X Bin(3, 6 ).
The expected payoff for the player is:
1 Pr[X = 0] + 1 Pr[X = 1] + 2 Pr[X = 2] + 3 Pr[X = 3] = $0.0787, i.e. this is
a not a fair game for the player.
6. (a) These are the possibilities:
i.
ii.
iii.
iv.
v.

LLL, and our winnings is $3

LLW, and our winnings is $1
LWL, and our winnings is $1
LWW, and our winnings is $1
W, and our winnings is $1

Pr[X > 0] = Pr[LWW occurs or W occurs] =

20
38

18
38

18
38

18
38

= 0.5917.

(b) No! Would you play a game where you win $1 with probability 0.6, and lose
$1 million with probability 0.4? May want to look at expected value of our
winnings!!

3






20 2 18
20 2 18
18 2 20
18
(c) E[X] = 3 20

1
+
1
+ 1 38
= $0.108.
38
38
38
38
38
38
38