Third rule for variance, Use the result of Exercise 25 to

Third rule for variance

Reference no: EM131938813

1. Show that Cov(XY) = E[XY] - E[X]E[Y]. Remember that gx = E[X] and gy = E[Y].

2. Prove that Var( X + Y) = Var X + Var Y + 2 Cov( X, Y).

3. Use the result of Exercise 25 to show that if A and Y are independent then Var( X + Y) = Var X + Var Y. This proves the third rule for variance.

Exercise 25

Prove that Var( X + Y) = Var X + Var Y + 2 Cov( X, Y).

Reference no: EM131938813

Questions Cloud

Theoretical mean value for x : Approximate the average time to failure for these lights based on the simulated data. Does this value agree well with the theoretical mean value for X?

Customer complains of an out-of-order phone : Past evidence shows that when a customer complains of an out-of-order phone there is an 8% chance that the problem is with the inside wiring.

Probability that exactly two defective welds : (a) The probability that exactly two defective welds and one improperly tightened bolt will be produced by the robots.

Do you think the rules concerning the use of strikes : Or would it be better for the union to negotiate different terms at the individual store level (i.e. treating each store as a separate employer)?

Third rule for variance : Use the result of Exercise 25 to show that if A and Y are independent then Var( X + Y) = Var X + Var Y. This proves the third rule for variance.

Find the curve of regression of x on y : (a) Find the curve of regression of X on Y. Is the regression linear?

What is the risk profile of your company : What is the risk profile of your company? (How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry or currency)?

Find an unbiased estimate for xs : (a) Find an unbiased estimate for Xs. (b) Find an unbiased estimate for the average number of requests received per hour.

What is the goal of any financial manager : Write a report about the Financial Management Principles. What is the goal of any financial manager? and what role does he play within the firm?

User Account

All Pages