Exercises

95

2.9 X and Y are discrete random variables with the following joint distribution:

Value of Y

2 4 6 8 10

3 0.04 0.09 0.03 0.12 0.01

Value of X 6 0.10 0.06 0.15 0.03 0.02
9 0.13 0.11 0.04 0.06 0.01

That is, Pr1X = 3, Y = 22 = 0.04, and so forth.

a. Calculate the probability distribution, mean, and variance of Y.

b. Calculate the probability distribution, mean, and variance of Y given
X = 6.
c. Calculate the covariance and correlation between X and Y.
2.10 Compute the following probabilities:

a. If Y is distributed N(4, 9), find Pr 1Y … 52.

b. If Y is distributed N(5, 16), find Pr 1Y 7 22.
c. If Y is distributed N(1, 4), find Pr 12 … Y … 52.
d. If Y is distributed N(2, 1), find Pr 11 … Y … 42.

2.11 Compute the following probabilities:

a. If Y is distributed x23, find Pr 1Y … 6.252.

b. If Y is distributed x 28 , find Pr1Y … 15.512.
c. If Y is distributed F8, ∞ , find Pr1Y … 1.942.
d. Why are the answers to (b) and (c) the same?
e. If Y is distributed x 21 , find Pr1Y … 0.52. (Hint: Use the definition of the
x 21 distribution.)

2.12 Compute the following probabilities:

a. If Y is distributed t 12, find Pr1Y … 1.362.

b. If Y is distributed t 30, find Pr1 -1.70 … Y … 1.702.
c. If Y is distributed N(0, 1), find Pr1 -1.70 … Y … 1.702.
d. When do the critical values of the normal and the t distribution coincide?
e. If Y is distributed F4, 11, find Pr1Y 7 3.362.
f. If Y is distributed F3, 21, find Pr1Y 7 4.872.

2.13 X is a Bernoulli random variable with Pr1X = 12 = 0.90; Y is distrib-

uted N(0, 4); W is distributed N(0, 16); and X, Y, and W are independent.
Let S = XY + 11 - X2W. (That is, S = Y when X = 1, and S = W when
X = 0.)

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 96 CHAPTER 2  Review of Probability

a. Show that E1Y 2 2 = 4 and E1W 2 2 = 16.

b. Show that E1Y 3 2 = 0 and E1W 3 2 = 0. (Hint: What is the skewness for
a symmetric distribution?)
c. Show that E1Y 4 2 = 3 * 42 and E1W 4 2 = 3 * 162. (Hint: Use the fact
that the kurtosis is 3 for a normal distribution.)
d. Derive E1S2, E1S2 2, E1S3 2, and E1S4 2. (Hint: Use the law of iterated
expectations conditioning on X = 0 and X = 1.)
e. Derive the skewness and kurtosis for S.

2.14 In a population, mY = 50 and s2Y = 21. Use the central limit theorem to
answer the following questions:

a. In a random sample of size n = 50, find Pr1Y … 512.

b. In a random sample of size n = 150, find Pr1Y 7 492.
c. In a random sample of size n = 45, find Pr150.5 … Y … 512.

2.15 Suppose Yi, I = 1, 2, c, n are i.i.d. random variables, each distributed

N120, 42.

a. Compute Pr119.6 … Y … 20.42 when (i) n = 25, (ii) n = 100, and

(iii) n = 800.
b. Suppose c is a positive number. Show that Pr120 - c … Y … 20 + c2
becomes close to 1.0 as n grows large.
c. Use your answer in (b) to argue that Y converges in probability to 20.

2.16 Y is distributed N(10, 100) and you want to calculate Pr1Y … 5.82. Unfor-
tunately, you do not have your textbook, and do not have access to a normal
probability table like Appendix Table 1. However, you do have your computer
and a computer program that can generate i.i.d. draws from the N(10, 100)
distribution. Explain how you can use your computer to compute an accurate
approximation for Pr1Y … 5.82.

2.17 Yi, i = 1, c, n, are i.i.d. Bernoulli random variables with p = 0.6. Let Y
denote the sample mean.

a. Use the central limit theorem to compute approximations for

i. Pr1Y Ú 0.642 when n = 50.
Pr1Y … 0.562 when n = 200.
ii. 
b. How large would n need to be to ensure that Pr10.65 7 Y 7 0.552 = 0.95?
(Use the central limit theorem to compute an approximate answer.)

2.18 In any year, the weather can inflict storm damage to a home. From year to
year, the damage is random. Let Y denote the dollar value of damage in any
given year. Suppose that in 95% of the years Y = $0, but in 5% of the years
Y = $30,000.

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