Explanation Given: The maximum price a prospective buyer would be willing to pay for a house is shown in the table below. Maximum Price Considered, x P(X = x) 480 10 500 490 20 500 500 75 500 510 85 500 520 70 500 550 90 500 580 90 100 600 55 500 650 5 500 Approach: The formula to calculate the average is given by, μ = x 1 + x 2 + .... + x n n ... ( 1 ) Here, μ is the average, x 1 , x 2 , …, x n are the values and n is the number of observations. The formula for variance is given by, Var ( X ) = 1 n ∑ ( x − μ ) 2 ... ( 2 ) Here, Var ( X ) is the variance. The formula for standard deviation is given by, σ = Var ( X ) ... ( 3 ) Here, σ is the standard deviation. Calculation: Substitute the values of x i where 1 ≤ i ≤ 9 in the equation (1) μ = 10 500 + 20 500 + 75 500 + 85 500 + 70 500 + 90 500 + 55 500 + 5 500 9 = 0.02 + 0.04 + 0.15 + 0.17 + 0.14 + 0.18 + 0.11 + 0.01 9 = 0.82 9 = 0.09 Substitute the values of x i where 1 ≤ i ≤ 9 and 44

Finite Mathematics for the Managerial, Life, and Social Sciences, 11th Edition

11th Edition

ISBN: 9781285464657

Author: Soo T. Tan

Publisher: Brooks Cole

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Chapter 8.3, Problem 28E

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The mean, variance, and standard deviation of the maximum price.

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Chapter 8 Solutions

Finite Mathematics for the Managerial, Life, and Social Sciences, 11th Edition

Ch. 8.1 - What is a random variable? Give an example.Ch. 8.1 - Prob. 2CQ Ch. 8.1 - Prob. 3CQ Ch. 8.1 - Three balls are selected at random without...Ch. 8.1 - 2.A coin is tossed four times. Let the random...Ch. 8.1 - A die is rolled repeatedly until a 6 falls...Ch. 8.1 - Cards are selected one at a time without...Ch. 8.1 - Prob. 5E Ch. 8.1 - Prob. 6E Ch. 8.1 - Prob. 7E

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The mean, variance, and standard deviation of the maximum price.

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Chapter 8 Solutions

To find:

The mean, variance, and standard deviation of the maximum price.