Discrete Random Variables
|Data recorded by…
|values for ‘x’
||Any real #
||How long? /heavy?
||P(x = 4)
||P(3 < x < 5)
- Expected value: symbol = E(x)
- Expected value = E(x) = μ
Applications of E(x)
A raffle has 400 tickets and has a first prize of $500, second prize of $200 and a third prize of $80. Prizewinners are drawn, without replacement, in order First consider $5 a ticket then $2 a ticket.
(1st, 2nd, 3rd).
Let X be a random variable representing the winnings of a single ticket buyer.
A house insured at a value of $240 000 has the probability of burning down estimated to be 0.0008 per year.
What should the insurance company charge for a premium if it wants to make an average profit of $240 per house per year that it is insured?
Let X be a random variable representing the amount that the company has to pay out.