Chapter 14

Random Variables

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 14.1

Center:
The Expected Value

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Expected Value: Center

A random variable assumes a value based on the

outcome of a random event.
• We use a capital letter, like X, to denote a random
variable.
• A particular value of a random variable will be
denoted with the corresponding lower case letter, in
this case x.

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Expected Value: Center (cont.)

There are two types of random variables:

• Discrete random variables can take one of a
countable number of distinct outcomes.
• Example: Number of credit hours
• Continuous random variables can take any numeric
value within a range of values.
• Example: Cost of books this term

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Expected Value: Center (cont.)

A probability model for a random variable consists of:

• The collection of all possible values of a random
variable, and
• the probabilities that the values occur.
Of particular interest is the value we expect a random
variable to take on, notated μ (for population mean) or
E(X) for expected value.

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Expected Value: Center (cont.)

The expected value of a (discrete) random variable can

be found by summing the products of each possible
value by the probability that it occurs:

m = E (X ) = å x P (x )
Note: Be sure that every possible outcome is included in
the sum and verify that you have a valid probability
model to start with.

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Expected Value: Center (cont.)
Example: On Valentine’s Day the Quiet Nook restaurant
offers a Lucky Lovers Special that could save couples
money on their romantic dinners. When the waiter brings
the check, he’ll also bring the four aces from a deck of
cards. He’ll shuffle them and lay them out face down on
the table. The couple will then get to turn one card over. If
it’s a black ace, they’ll owe the full amount, but if it’s the
ace of hearts, the waiter will give them a $20 Lucky
Lovers discount. If they first turn over the ace of diamonds
they’ll then get to turn over one of the remaining cards,
earning a $10 discount for finding the ace of hearts this
time. What’s the expected discount for a couple?
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Expected Value: Center (cont.)
Solution: Let X = the Lucky Lovers discount. The
probabilities of the three outcomes are:
1
𝑃(𝑋 = 20) = P(Ace of Hearts)
4
1 1 1
𝑃(𝑋 = 10) = ⋅ =
4 3 12
P(Ace of Diamonds, then Ace of Hearts)
1 1 2
𝑃(𝑋 = 0) = 1 − + = P(Black Ace)
4 12 3

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Expected Value: Center (cont.)
Solution: Thus, the probability model is:

1 1 2 70
So, 𝐸(𝑋) = 20 ⋅ + 10 ⋅ +0⋅ = = 5.83
4 12 3 12
Couples dining at the Quiet Nook can expect an average
discount of $5.83.
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 14.2

Spread:
The Standard
Deviation

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First Center, Now Spread…

For data, we calculated the standard deviation by first

computing the deviation from the mean and squaring it.
We do that with discrete random variables as well.
The variance for a random variable is:
s = Var ( X ) = å (x - m ) P (x )
2 2

The standard deviation for a random variable is:

s = SD ( X ) = Var ( X )

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The Standard Deviation
Example: The probability model for the Lucky Lovers
restaurant discount is:

We found that couples can expect an average discount of

$5.83. What is the standard deviation of the discounts?

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The Standard Deviation
Solution:
First find the variance:

𝑉𝑎𝑟(𝑋) = 𝑥−𝜇 ⋅ 𝑃(𝑥 )

1 1 2
= 20 − 5.83 ⋅ + 10 − 5.83 ⋅ + 0 − 5.83 ⋅
4 12 3
≈ 74.306
So, 𝑆𝐷(𝑋) = 74.306 ≈ 8.62

Couples can expect the Lucky Lovers discounts to

average $5.83, with a standard deviation of $8.62.
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 14.3

Shifting and
Combining Random
Variables

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More About Means and Variances
Adding or subtracting a constant from data shifts the mean
but doesn’t change the variance or standard deviation:
E(X ± c) = E(X) ± c Var(X ± c) = Var(X)

Example: We’ve determined that couples dining at the

Quiet Nook can expect Lucky Lovers discounts averaging
$5.83 with a standard deviation of $8.62. Suppose that for
several weeks the restaurant has also been distributing
coupons worth $5 off any one meal (one discount per table).

QUESTION: If every couple dining there on Valentine’s Day

brings a coupon, what will be the mean and standard
deviation of the total discounts they’ll receive?
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More About Means and Variances
Solution: Let D = total discount then D = X + 5.

E(D) = E(X+5) = E(X) +5 = 5.83+5 = $10.83

Var(D) = Var(X+5) = Var(X) = 8.62

SD(D) = SD(X+5) = SD(X) = $8.62

Couples with the coupon can expect total discounts

averaging $10.83. The standard deviation is still $8.62.

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More About Means and Variances (cont.)
In general, multiplying each value of a random variable
by a constant multiplies the mean by that constant and
the variance by the square of the constant:
E(aX) = aE(X) Var(aX) = a2Var(X)

Example: On Valentine’s Day at the Quiet Nook, couples

may get a Lucky Lovers discount averaging $5.83 with a
standard deviation of $8.62. When two couples dine
together on a single check, the restaurant doubles the
discount offer. What are the mean and standard
deviation of discounts for such foursomes?

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More About Means and Variances (cont.)
Solution: Let D = total discount; then D = 2X.

E(D) = E(2x) = 2*E(X) = 2(5.83) = $11.66

Var(D) = Var(2X) = 2 Var(X) = 4(8.62 ) = 297.2176

SD(D) = SD(2X) = 297.2176 = $17.24

If the restaurant doubles the discount offer, two couple

dining together can expect to save an average of $11.66
with a standard deviation of $17.24.

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More About Means and Variances (cont.)

In general,
• The mean of the sum of two random variables is the
sum of the means.
• The mean of the difference of two random variables
is the difference of the means.
E(X ± Y) = E(X) ± E(Y)
• If the random variables are independent, the
variance of their sum or difference is always the sum
of the variances.
Var(X ± Y) = Var(X) + Var(Y)

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 14.4

Continuous Random
Variables

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Continuous Random Variables

Random variables that can take on any value in a range

of values are called continuous random variables.
Now, any single value won’t have a probability, but…
Continuous random variables have means (expected
values) and variances.
We won’t worry about how to calculate these means and
variances in this course, but we can still work with
models for continuous random variables when we’re
given the parameters.

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Continuous Random Variables (cont.)

Good news: nearly everything we’ve said about how

discrete random variables behave is true of continuous
random variables, as well.
When two independent continuous random variables
have Normal models, so does their sum or difference.
This fact will let us apply our knowledge of Normal
probabilities to questions about the sum or difference of
independent random variables.

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What Can Go Wrong?

Probability models are still just models.

• Models can be useful, but they are not reality.
• Question probabilities as you would data, and think
about the assumptions behind your models.
If the model is wrong, so is everything else.

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What Can Go Wrong? (cont.)

Don’t assume everything’s Normal.

• You must Think about whether the Normality
Assumption is justified.
Watch out for variables that aren’t independent:
• You can add expected values for any two random
variables, but
• you can only add variances of independent random
variables.

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What Can Go Wrong? (cont.)

Don’t forget: Variances of independent random variables

add. Standard deviations don’t.
Don’t forget: Variances of independent random variables
add, even when you’re looking at the difference
between them.
Don’t write independent instances of a random variable
with notation that looks like they are the same
variables.

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Chapter Review

We know how to work with random variables.

• We can use a probability model for a discrete
random variable to find its expected value and
standard deviation.
The mean of the sum or difference of two random
variables, discrete or continuous, is just the sum or
difference of their means.
And, for independent random variables, the variance of
their sum or difference is always the sum of their
variances.

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Chapter Review (cont.)

Normal models are once again special.

• Sums or differences of Normally distributed random
variables also follow Normal models.

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