WEEK 3

DAY 1
LEARNING COMPETENCIES
 Illustrates the mean and variance of a discrete random variable
 Calculates the mean and variance of a discrete random variable
Solve problems involving mean and variance of probability distributions.
Interpret the mean and the variance of a discrete random variable.
VARIANCE, AND STANDARD DEVIATION OF A
DISCRETE RANDOM VARIABLE
The variance of a random variable X is denoted by . It
can likewise be written as Var(x).
or
where:
x = outcome
= population mean
P(x) = probability of the outcome
 The larger the value of the variance, the farther
are the values of X from the mean.
The standard deviation of a discrete random
variable X is written as . It is the square root of the
variance.
Variance – it measures how far a
set of numbers are spread out from
their average .
 EXAMPLE 4
Determine the variance and the standard
deviation of the following probability mass
function.
x P(x)
1 0.15
2 0.25
3 0.30
4 0.15
5 0.10
6 0.05
Steps:
 Findthe expected value.
Subtract the expected value from each outcome.
Square each difference
Multiply each difference by the corresponding
probability.
Sum up all the figures obtained in step4.
 x P(x) xP(x) x- ( (
1 0.15 0.15 1 - 2.95= -1.95 3.8025 0.570375
2 0.25 0.50 2 – 2.95 =0.95 0.9025 0.225625
3 0.30 0.90 3 – 2.95 = 0.05 0.0025 0.000750
4 0.15 0.60 4 – 2.95 = 1.05 1.1025 0.165375
5 0.10 0.50 5 – 2.95 = 2.05 4.2025 0.420250
6 0.05 0.30 6 – 2.95 = 3.05 9.3025 0.465125
E(X) =
= 2.95
1.8475
=
=
E(X) =
= 1.359227
= 2.95 1.8475
 EXAMPLE 5
Determine the variance and the standard
deviation of the following probability mass
function:
x P(x)
0 0.1
1 0.2
2 0.3
3 0.3
4 0.1
SOLUTION:
x P(x) x P(x) x- ( ( P(x)
0 0.1 0 0 – 2.1= -2.1 4.41 0.441
1 0.2 0.2 1 -2.1 = -1.1 1.21 0.242
2 0.3 0.6 2-2.1 =-0.1 0.01 0.003
3 0.3 0.9 3 – 2.1 =0.9 0.81 0.243
4 0.1 0.4 4 – 2.1 = 1.9 3.61 0.361

= 1.29

= =
= 2.1 = 1.29 =
= 1.14
Alternative method
Steps:
Multiply the outcome by the corresponding probability.
Square x or the outcome
Multiply the square of x by their corresponding probability.
Sum up all the figures obtained in step 1
Sum up all the figures obtained in step 3.
The variance of a discrete random variable can also be
determined by subtracting the square of its mean from
the summation of the products of the squares of the
outcomes and their corresponding probabilities.
Hence, the formula is
= -(
 EXAMPLE 6
A discrete random variable X has this probability
distribution.
x P(x)
0 0.12
1 0.25
2 0.18
3 0.35
4 0.10

Find the variance and the standard deviation of X.

Solution:
x P(x) xP(x) x- ( (P(x)

0 0.12 0 0-2.06 = - 2.06 4.2436 0.509232

1 0.25 0.25 1 – 2.06= -1.06 1.1236 0.2809
2 0.18 0.36 2 – 2.06 = -0.06 0.0036 0.000648
3 0.35 1.05 3 – 2.06 = 0.94 0.8836 0.30926
4 0.10 0.40 4 – 2.06 = 1.94 3.7636 0.37636
= 1.4764

=
= = 1.2151
= 2.06 = 1.4764
 DAY 2
Problems involving mean
AND VARIANCE OF
PROBABILITY
DISTRIBUTION
 The mean of a discrete random variable can be
thought of as “anticipated” value. It is the average
that is expected to be the result when a random
experiment is continually repeated. It is the sum
of the possible outcomes of the experiment
multiplied by their corresponding probabilities.
it has many applications in real life , such as in comparing
insurance policies, making financial decisions , or in deciding
whether or not to participate in games of chance like lotteries
or gambling.
a common application of mathematical expectation is in
analyzing games of chance.
let x be the random variable representing the amounts of gains
or losses that a player can incur when playing a game of chance.
the expected value of x is called the value of the game. if the
value is equal to the amount the player needs to pay to play the
game , then the game is said to be fair.
a fair game means that if the player were to keep
playing the game in the long run , his winnings and
losses will even out.

a game may also be considered fair by letting x be the

player’s net gain in playing the game.if the expected
value of x is 0, then the game is considered fair.
 Example 1
The officers of SJA Class 71 decided to conduct a
lottery for the benefit of the less privileged
students of their alma mater. Two hundred tickets
will be sold. One ticket will win Php5,000 price
and the other tickets will win nothing. If you will
buy one ticket, what will be your expected gain?
Solution :
One ticket will have a gain of 5000 but the probability of winning
will only be or 0.005 . The remaining tickets will have a gain of 0 ,
and the probability will be or 0.995 .

x P(x) x

0 0.995 0

5000 0.005 25

= 25

= 25
The expected gain is 25.00
 Example 2
The officers of the faculty club of a public high
school are planning to sell 160 tickets to be raffled
during the Christmas party. One ticket will win
Php3,000. The other ticket will win nothing. If you
are a faculty member of the school and you will
buy one ticket, what will be the expected value and
variance of your gain?
 Solution:
One ticket will have a gain of 3000 but the probability of winning will
only be or 0.00625 .The remaining tickets will have a gain of 0 , and
the probability will be or 0.99375 .

x P(x) xP(x) P(x)

0 0.99375 0 0
3000 0.00625 18.75 56,250
= 18.75 = 56,250

The expected
= 18.75 =- value is 18.75.
The variance of your gain is 55,898.44 and
= 56,250 - it indicates how spread out the values of
= 56,250- 351.5625 x are around the mean. Given the large
value, this shows that the values are very
= 55,898.44 far away from each other.
EXAMPLE 3
A game consists of drawing one card from a deck
of cards. If the card drawn is a face card ( jack,
queen,or king ) , the player wins 100 pesos.
Otherwise , he losses 30 pesos. Determine if the
game is fair.
Solution:
Let X be the amount a player can win or lose in one
round for the game.
He wins 100pesos with a probability of 12/52 or 3/13 ,
and loses 30 pesos with a probability of 40/52 or 10/13.
E(X) = 3/13 (100) + 10/13 (-30) = 0.
THE player’s expected net gain is 0 , the game is
considered fair.