Question

A car dealership sells 0, 1, or 2 luxury cars on any day. When selling a car, the dealer also tries to persuade the customer to buy an extended warranty for the car. Let X denote the number of luxury cars sold in a given day, and let Y denote the number of extended warranties sold. The joint probability function of X and Y can be given by the following equation.
P(X = 0, Y = 0) =1/6
P(X = 1, Y = 0) =1/12
P(X = 1, Y = 1) =1/6
P(X = 2, Y = 0) =1/12
P(X = 2, Y = 1) =1/3
P(X = 2, Y = 2) =1/6

Required:
Find the mean and variance of X.

Answer 1

Answer:

Mean = 1.42

Variance = 0.58

Step-by-step explanation:

Given: X denote the number of luxury cars sold in a given day, and Y denote the number of extended warranties sold.

Also, joint probability function of X and Y are given.

To find:

mean and variance of X

Solution:

From the given joint probability function of X and Y,

$P(X=0)=\frac{1}{6}\\P(X=1)=\frac{1}{12}+\frac{1}{6}=\frac{1+2}{12}=\frac{3}{12}\\P(X=2)=\frac{1}{12}+\frac{1}{3}+\frac{1}{6}=\frac{1+4+2}{12}=\frac{7}{12}$

Mean of X:

$E(X)=\sum XP(X)\\=0\left ( \frac{1}{6} \right )+1\left ( \frac{3}{12} \right )+2\left ( \frac{7}{12} \right )\\=0+\frac{3}{12}+\frac{14}{12}\\=\frac{17}{12}=1.42$

Variance of X:

$E(X^2)=\sum X^2P(X)\\=0^2\left ( \frac{1}{6} \right )+1^2\left ( \frac{3}{12} \right )+2^2\left ( \frac{7}{12} \right )\\=0+\frac{3}{12}+\frac{28}{12}\\=\frac{31}{12}$

$var(X)=E\left [ X^2 \right ]-\left ( E\left [ X \right ] \right )^2\\=\frac{31}{12}-\left ( \frac{17}{12} \right )^2\\=\frac{31}{12}-\frac{289}{144}\\=\frac{372-289}{144}\\=\frac{83}{144}\\=0.58$