Mathematical Expectations

Expectations
Expectations
Example1: An automobile dealer calculates the proportion of new cars
sold that have been returned a various numbers of times for the
correction of defects during the warranty period. The results are shown
in the following table.

Find the mean of the number of returns of an automobile for

corrections for defects during the warranty period.
Expectations
Expectations
Expectations
Expectations
Variance and Covariance of Random Variables
Variance and Covariance of Random Variables
Example1 (Cont.): Find the variance and standar deviation of the
number of returns of an automobile for corrections for defects during
the warranty period.
Variance and Covariance of Random Variables
Theorem:
Variance and Covariance of Random Variables
Variance and Covariance of Random Variables
Theorem:
Variance and Covariance of Random Variables

It can be shown that the correlation coefficient ranges from -1 to +1.

The closer ρ is to +1, the closer the data points are to an increasing straight line,
indicating a positive linear relationship.
The closer ρ is to -1, the closer the data points are to a decreasing straight line,
indicating a negative linear relationship.
When ρ = 0, there is no linear relationship between x and y but not necessarily a
lack of relationship.
Means and Variances of Linear Combinations of
Random Variables
• If a and b are constants, thenE[aX + b] = aE[X] + b.
• The expected value of the sum or difference of two or more functions
of a random variable X is the sum or difference of the expected values
of the functions. That is,
E[g(X) ± h(X)] = E[g(X)] ± E[h(X)].
• The expected value of the sum or difference of two or more functions
of the random variables X and Y is the sum or difference of the
expected values of the functions. That is,
E[g(X, Y ) ± h(X, Y )] = E[g(X, Y )] ± E[h(X, Y )].
Means and Variances of Linear Combinations of
Random Variables
• Let X and Y be two independent random variables. Then
• E(XY ) = E(X)E(Y ).
• Covariance(X,Y)=0

Theorem: