Presentation on theme: "Arithmetic of random variables: adding constants to random variables, multiplying random variables by constants, and adding two random variables together."— Presentation transcript:
1Arithmetic of random variables: adding constants to random variables, multiplying random variables by constants, and adding two random variables togetherAP Statistics Bpp
2Pp. 373-74 are just plain hard I don’t like the way they are written They give you the conclusion, but don’t give you a sense of WHY the rule is what it isThis lecture gives you the derivation of the rulesYou do not have to memorize the derivations, but if you understand them, you will understand why the rules are what they are
3Outline for lecture 3 basic ideas: Adding a constant to a random variable (X+c)Multiplying a random variable by a constant (aX)Adding two random variables together (X+Y)Being able to add two random variables is extremely important for the rest of the course, so you need to know the rulesOnce you can apply the rules for μX+Y and σX+Y, we will reintroduce the normal model and add normal random variables together (go z-tables!)
4Remember!It may be useful to take notes, but this PowerPoint with the narration will be posted on the Garfield web site.So will a version that does not have narration if you want a smaller file.Different learning: classes like this that make the lectures available on line require different skills than classes where your notes are all you have.
5Beginning conceptsLet’s look at the algebra behind adding, subtracting, and multiplying/dividing random variables.Here, we will only examine addition and multiplicationSubtraction is simply adding the negative of the addendDivision is simply multiplying by the reciprocal of the divisor
6Adding a constant to a random variable The first thing we’ll try is adding a constant c to a random variable.We will first calculate the mean, and then look at the varianceRemember that given the variance, we can always take its square root and obtain the standard deviation.
7E(X+c)=E(X)+c, where c=some real number For the next slides, we’re going to be expanding the series being summed, and then regrouping the variables and simplifying.
8Expanding the seriesLet’s expand without the sigma (adding) operator to keep the algebra neater.
9Rewriting the equation We can rewrite this as a series of individual fractions, sinceThus,
10Regrouping the equation Now, collect like terms:Note that c/n in parenthesis appears n timesNow, rewrite this as a sum:
11Var(X+c) Var(X+c)=VarX. We start with the basic definition for variation (VarX):If we have add a constant c on to random variable X, we have Xi+c replacing XiRemember, the new mean is μX+c.
12Substitute and rewrite the equation So we substitute Xi-c for Xi, and μX+c for μX, to get:Let’s again deal only with the numerator and expand the square:
13Quite a mess, right? Look at this: You wanna simplify THAT????? So let’s simplify it by NOT expanding the square.Instead, what is (Xi+c)-(μX+c) equal to BEFORE we square it?
14Simple, simple, simpleDistribute the subtraction operator over μX+c, and we should get:Xi+c-μX-c=Xi-μXIf we substitute Xi-μX into the numerator, we get our original definition of variation, i.e.,
15What about the standard deviation? The fact that the VARIANCE does not change means the STANDARD DEVIATION does not change, either.How come? Remember thatSince VAR does not change, the standard deviation also does not change when a constant is added to the random variable
16What have we proven so far? We have looked at the effect of adding a constant to a random variable X, i.e., using X+cWe have 3 conclusions for X+c:μX+c=μX+cσX+c=σXVar(X+c)=Var(X)
17Multiplying a random variable by a constant Now let’s see what happens when we MULTIPLY the random variable X by some constant aLet’s look at the mean first: μaX.We will substitute aX for X in the definition of the mean:
18Expand and analyzeAgain, let’s expand the Xi terms without the sigma:
19Variance when the random variable is multiplied Seeing what happens with the variance upon multiplication is similar to adding a constant:
20Again, what about the standard deviation? This derivation also explains why, when we multiply a random variable by a, the standard deviation is a multiple a of the standard deviation of the random variable.Recall the definition of the standard deviation:
21Standard deviation: substitute and solve Substitute “aX” for X, and we get
22Recap of conclusion for aX (multiplying the random variable by a constant Once again, three conclusions:
23Final approach: adding two random variables together Let’s substitute in X+Y into our formulae to find out how they change(Remember that X-Y can be recast as an addition problem X+(-Y), so we do not need a separate derivation for X-Y)
24Calculating the mean when adding two random variables We again start with the standard definition of the mean, except that we substitute “X+Y” for X:Once again, calculating the mean is easy peasy.
25Calculating the variance The variance, of course, will be harder and messier. In fact, the derivation is so bad that you’ll have to accept this one on faith:Var(X±Y)=Var(X)+Var(Y)
26What about standard deviations? First, let’s derive them from the Var formulaSince ,Therefore: