SH1660

Mean and Variance of a Random Variable

MEAN ( "# $̅ )
Sum of the set of & measurements divided by &.
VARIANCE (' * "# + * )
Sum of squared deviations of measurements about the mean divided by (& − 1).
RANDOM VARIABLE
Numerical description of the outcome of an experiment.

Mean or Expected Value

Definition. Let $ be a discrete random variable with a probability distribution -($). The mean
or expected value of $ denoted as .($) is given as
2

= .($) = / $0 -($0 )
034

Where the elements are summed over all values of the random variable $.

Characteristics of the Mean

· The expected value or the mean of a random variable 5 is the value that you would expect to
observe on average if the experiment is repeated over and over again.
· The expected value or the mean of a random variable 5 is a measure of the central location for
the random variable.
· It is a weighted average of the values the random variable may assume. The weights are the
probabilities.
· It does not have to be a value the random variable can assume.

Variance
Definition. Let $ be a discrete random variable with a probability distribution -($) and mean
. The variance of $ is given as
2
* *
*
' = . 67$ − 8 9 = /7$0 − 8 -($0 )
034

Where the summation is over all values of the random variable $.

Standard Deviation
Definition. The standard deviation ' of a random variable $ is equal to the positive square root
of the variance.

02 Handout 1 *Property of STI

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 SH1660

Characteristics of the Variance

· The variance is a weighted average of the squared deviations of a random variable from its
mean. The weights are the probabilities.
· It describes the spread or variability of the random variable using the average or expected value
of the squared deviations of the $-values from their mean .
· It does not have to be a value the random variable can assume.

Recall that the formula in getting the variance of a random variable is:
* *
' * =. 67$ − 8 9 = ∑20347$0 − 8 -($0 )

*
Step 1: Expand 7$0 − 8
2 2
*
/7$0 − 8 -($0 ) = /($0* − 2 $0 + *
)-($0 )
034 034

Step 2: Distribute ∑2034 -($0 ) inside ($0* − 2$0 + *

)
2 2 2

/ $0* -($0 ) − 2 / $0 -($0 ) + *

/ -($0 )
034 034 034

Note that 2 is outside the summation operator because it is a constant and it does not depend on
subscript ?.

Step 3: Recall that ∑2034 $0 -($0 ) = and ∑2034 -($0 ) = 1 from the property of discrete probability
distribution. Substituting these values,
2

/ $0* -($0 ) − 2 ( ) + *
(1)
034
Step 4: Simplifying,
2
*
/ $0* -($0 ) − 2 + *

034
2
*
= / $0* -($0 ) −
034

Step 5: Let .($ * ) = ∑2034 $0* -($0 ). Therefore, the new formula for the variance is:
*
' * = .($ * ) −

02 Handout 1 *Property of STI

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