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E[X]=μX=E[X]=μX= dollars. (Round the answer to 1 decimal place.)  SD[X]=σX=SD[X]=σX= dollars. (Round the answer to 1 decimal place.)

E[X]=μX=E[X]=μX= dollars. (Round the answer to 1 decimal place.)  SD[X]=σX=SD[X]=σX= dollars. (Round the answer to 1 decimal place.)

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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María Victoria has purchased the insurance policy from an insurance company to cover the value of hers house in case if it gets destroyed due to a fire for the price of $2300 per year. María Victoria's house is worth $370000 and the probability that fire destroys the house during the length of the policy is estimated to be 0.5%. Let XX  be the insurance company's profit. Answer the following questions:

1. Create the probability distribution table for XX :

 XX  outcome profit xx ,$  P(X=x)P(X=x) 
  the house is destroyed    
 

the house survived

    

2. Use the probability distribution table to find the following:

    1.  E[X]=μX=E[X]=μX= dollars. (Round the answer to 1 decimal place.)
    2.  SD[X]=σX=SD[X]=σX= dollars. (Round the answer to 1 decimal place.)
Expert Solution
Introduction
Simply multiply each value of the discrete random variable by the probability associated with 
that value to obtain the expected value, E(X), or mean. 
Given is the formula:
 
E(X)=μ=∑xP(x)
 

To find the standard deviation, σ, of a discrete random variable X, simply take the square root of the variance

SD=Var(x)where Var(x)=E(x2)-[E(x)]2

 

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