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SH1660

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Date:
Score:

Make your unknown known!


Mean and Variance of a Random Variable
Directions: Solve each of the following problems. Show necessary solutions.

1. The following table provides a probability distribution for the random variable !.

! 2 5 9

"(!) 0.24 0.48 ______


Determine what is being asked. (4 items x 2 points)
a. "(9) =

b. #(!) =

c. $ % =

d. $ =

2. By investing in a business, Rita can make a profit in a year of ₱150,000 with a probability of
0.28 or take a loss of ₱10,000 with a probability of 0.72. What is Rita’s expected gain?
(5 points)

3. Ms. Carmela purchased an insurance at ₱12,000 per year. The insurance company feels that
probabilities of claims of ₱10,000, ₱30,000, ₱50,000, and ₱100,000 are 0.12, 0.14, 0.08,
and 0.02, respectively. What is the expected insurance premium of the insurance? Can the
insurance company expect to make a profit of ₱600 per policy? (5 points)

02 Activity 1 *Property of STI


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SH1660

4. The following probability distributions of job satisfaction scores for a sample of information
systems (IS) senior executives and IS middle managers range from a low of 1 (very
dissatisfied) to a high of 5 (very satisfied). (5 items x 5 points)
Probability
Job Satisfaction Score IS Senior Executives IS Middle Managers
1 0.05 0.04
2 0.09 0.10
3 0.03 0.12
4 0.42 0.46
5 0.41 0.28

a. Let #' (!) be the expected value of the job satisfaction score for senior executives. Find
#' (!)

b. Let #* (!) be the expected value of the job satisfaction score for middle managers. Find
#* (!).

c. Let $'% be the variance of the job satisfaction score for senior executives and $*
%
be the
variance of the job satisfaction score for middle managers. Find $'% and $* %
.

d. Compute for the standard deviation ($' and $* ) of job satisfaction ratings for both
probability distributions.

e. Compare the overall job satisfaction of senior executives from middle managers.

Rubric for scoring:


Criteria Points
Complete solution with correct answer 5
Last two major steps of the solution are incorrect. 4
Half of the solution is correct. 3
First two major steps of the solution are correct. 2
First major step of the solution is correct. 1

02 Activity 1 *Property of STI


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