Question

2. The following table gives the joint PDF of random variables X and Y, where X...

2. The following table gives the joint PDF of random variables X and Y, where X is the first-year rate of return (%) from investment A, and Y is the first-year rate of return (%) from investment B.

   X (%)

   Y (%)

   -10

0

20

30

   0

0.27

   0.08

0.16

   0.00

45

0.00

   0.04

0.10

   0.35

A. Calculate the expected rate of return from investment A.

B. What is the expected rate of return on investment B if X = 20?

C. Calculate the variances, covariance, and correlation coefficient of X and Y.

D. Are X and Y independent random variables? How do you know? Explain.

Math   Statistics-And-Probability   
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