E120

Homework 7
Due 11/07/2014

1. Let Z be a random variable with probability mass function p() such that p(0) = 0.1,
p(1) = 0.3, p(2) = 0.3, p(3) = 0.1, and p(4) = 0.2.
(a) Find E[Z]
(b) Find E[Z E[Z]]
(c) Find E[Z2 ]
(d) Find E[Z3 ]
(e) Find E[sin(Z) + 2 Z]
(f) Find E[(Z E[Z])2 ]
(g) Find Var[Z]
2. Suppose that X and Y are random variables such that Var[X] = Var[Y ] = Cov[X, Y ] =
1, find
(a) Var(3 X)
(b) Var(2X + 4)
(c) Var(X Y )
(d) Cov(X, X)
(e) Cov(X, X + Y )
(f) Var(4X + Y 7)
3. Suppose there are three students playing a game with an unbiased coin. There is 1
dollar on the table. And the coin will be flipped twice. Student A get the money if two
tosses are head, student B get the money if two tosses are tail, and student C get the
money otherwise. Now let X denote the money student A get, Y denote the money
student B get, and Z denote the money student C get. Calculate the following
(a) E[X]
(b) Var(Z)
(c) Cov(X, Y ), Cov(Y, Z)
(d) Var(X + Y + Z)

4. Tom and Mike are betting on an unbiased dice. They roll the dice twice. Tom will pay
Mike $10 if the sum is 12 and $1 if the sum is even but not 12. On the other hand,
Mike will pay Tom $8 if the sum is 3 and $1 if the sum is odd but not 3. Now let X
denote the money Tom will get (negative if he loses), and Y denote the money Mike
will get (negative if he loses). Calculate
(a) E[X], E[Y ]
(b) Var[X], Var[Y ]
(c) Cov(X, Y )
5. Consider the following wheel-of-fortune game: A player bets on one of the numbers 1
through 6. Three dice are then rolled, and if the number bet by the player appears i
times, i = 1, 2, 3, then the player wins i units; on the other hand, if the number bet
by the player does not appear on any of the dice, then the player loses 1 unit. Is this
game fair to the player?
6. A gambling book recommends the following winning strategy for the game of roulette.
It recommends that a gambler bet $1 on red. If red appears (which has probability
18
), then the gambler should take her $1 profit and quit. If the gambler loses this
38
of occurring), she should make additional $1 bets on red
bet (which has probability 20
38
on each of the next two spins of the roulette wheel and then quit. Let X denote the
gamblers winnings when she quits.
(a) Find Pr[X > 0]
(b) Are you convinced that the strategy is indeed a winning strategy? Explain your
answer!
(c) Find E[X]