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    Stat 230 Problem Set 2

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    N squared
    This document contains 6 problems related to statistics concepts. The problems cover topics such as standard deviation and mean calculations with temperature conversions, expected value and standard deviation calculations for medical expenses modeled by a probability distribution, proving Chebyshev's inequality, showing a property of covariance, deriving a probability mass function from a cumulative distribution function, and calculating expected value and variance for functions of random variables.

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    Stat 230 Problem Set 2

    Uploaded by

    N squared
    117 views1 page
    This document contains 6 problems related to statistics concepts. The problems cover topics such as standard deviation and mean calculations with temperature conversions, expected value and standard deviation calculations for medical expenses modeled by a probability distribution, proving Chebyshev's inequality, showing a property of covariance, deriving a probability mass function from a cumulative distribution function, and calculating expected value and variance for functions of random variables.

    Original Description:

    Advanced statistics notes about probability and its application

    Original Title

    Problem Set 2

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    This document contains 6 problems related to statistics concepts. The problems cover topics such as standard deviation and mean calculations with temperature conversions, expected value and standard deviation calculations for medical expenses modeled by a probability distribution, proving Chebyshev's inequality, showing a property of covariance, deriving a probability mass function from a cumulative distribution function, and calculating expected value and variance for functions of random variables.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    117 views1 page

    Stat 230 Problem Set 2

    Uploaded by

    N squared
    This document contains 6 problems related to statistics concepts. The problems cover topics such as standard deviation and mean calculations with temperature conversions, expected value and standard deviation calculations for medical expenses modeled by a probability distribution, proving Chebyshev's inequality, showing a property of covariance, deriving a probability mass function from a cumulative distribution function, and calculating expected value and variance for functions of random variables.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Stat 230 Problem Set 2

    1. If the temperature at which a certain compound melts is a random variable with mean
    130 C and standard deviation 3 C, what are the mean temperature and standard deviation measured in F? [Hint: F=1.8 C+32.]
    2. Let X be the total medical expenses (in 1000s of dollars) incurred by a particular individual during a given year. Although X is a discrete random variable, its distribution
    is quite well approximated by a continuous distribution with pdf f (x) = k(1 + x/2.5)7
    for x 0.
    (a)
    (b)
    (c)
    (d)

    What is the value of k?


    Graph the pdf of X.
    What are the expected value and standard deviation of total medical expenses?
    This individual is covered by an insurance plan that entails a $500 deductible provision (so the first $500 worth of expenses are paid by the individual). Then the plan
    will pay 80% of any additional expenses exceeding $500, and the maximum payment by the individual (including the deductible amount) is $2500. Let Y denote
    the amount of this individuals medical expenses paid by the insurance company.
    What is the expected value of Y ? [Hint: First figure out what value of X corresponds to the maximum out-of-pocket expense of $2500. Then write an expression
    for Y as a function of X (which involves several different pieces) and calculate the
    expected value of this function.]

    3. Use the fact that


    X

    X
    (x )2 p(x)
    x

    (x )2 p(x)

    x: |x|k

    for any mass function p() to prove Chebyshevs inequality.


    4. Show that cov(X + Y, Z) = cov(X, Z) + cov(Y, Z).
    5. If the cumulative distribution of X is given

    3
    F (b) = 54

    10
    1

    by
    b<0
    0b<1
    1b<2
    2b<3
    3 b < 3.5
    b 3.5

    calculate the probability mass function of X.


    6. If E(X) = 1 and var(X) = 5, find
    
    
    (a) E (2 + X)2
    (b) var(4 + 3x)

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