Compute the Variance and Standard Deviation of a Discrete Random

question 10

Multiple Choice

Compute the Variance and Standard Deviation of a Discrete Random Variable
-The owner of a farmer s market was interested in determining how many oranges a person buys when they buy oranges. He asked the cashiers over a weekend to count how many oranges a person bought when they bought oranges and record this number for analysis at a later time. The data is given below in the table. The random variable x represents the number of oranges purchased and P(x) represents the probability that a customer will buy x oranges. Determine the variance of the number of oranges purchased by a customer. $\begin{array}{|c|c|c|c|c|c|c|c|c|c|c|}\hline x & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \\\hline P(x) & 0.05 & 0.19 & 0.20 & 0.25 & 0.12 & 0.10 & 0 & 0.08 & 0 & 0.01 \\\hline\end{array}$

• A) \(3.57\)
• B) \(1.95\)
• C) \(3.97\)
• D) \(0.56\)

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Definitions:

Rate of Interest

The percentage of an amount of money which is charged for its use per period, often annually.

Future Value

The future valuation of an asset or cash that has the same worth as a particular sum at present.

Present Value

Today's value of a future financial amount or series of cash disbursements, based on an agreed-upon rate of return.

Discount Rate

The discount rate applied to project the present value of future cash flows from a financial instrument.