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- Let X1,X2,... be a sequence of identically distributed random variables with E|X1|<∞ and let Yn = n−1max1≤i≤n|Xi|. Show that limnE(Yn) = 0Let Xi be iid Exp(λ) random variables.1. Let Mn = max1≤i≤n Xi. Compute the CDF FMn (x).2. Using the identity P(X > x) = exp(−λx), show that if an = log n, and Yn = Mn − an, thenFYn(x) → e^(-e^-x).3. * What does this say, heuristically, about the order of magnitude of Yn?(b) Let Z be a discrete random variable with E(Z) = 0. Does it necessarily follow that E(Z³) = 0? If yes, give a proof; if no, give a counterexample.
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- Let i_t denote the effective annual return achieved on an equity fund achieved between time (t -1) and time t. Annual log-returns on the fund, denoted by In(1 + i_t) , are assumed to form a series of independent and identically distributed Normal random variables with parameters u = 6% and o = 14%.An investor has a liability of £10,000 payable at time 15. Calculate the amount of money that should be invested now so that the probability that the investor will be unable to meet the liability as it falls due is only 5%. Using only formulas, no tablesLet X1, X2, X3, . . . be a sequence of independent Poisson distributed random variables with parameter 1. For n ≥ 1 let Sn = X1 + · · · + Xn. (a) Show that GXi(s) = es−1.(b) Deduce from part (a) that GSn(s) = ens−n.Each of 14 refrigerators of a certain type has been returned to a distributor because of an audible, high-pitched, oscillating noise when the refrigerators are running. Suppose that 9 of these refrigerators have a defective compressor and the other 5 have less serious problems. If the refrigerators are examined in random order, let X be the number among the first 6 examined that have a defective compressor. (I have figured out part "a" but need help with "b" and P(X ≤ 3) in "c") (a) Calculate P(X = 4) and P(X ≤ 4). (Round your answers to four decimal places.) P(X = 4) = P(X ≤ 4) = (b) Determine the probability that X exceeds its mean value by more than 1 standard deviation. (Round your answer to four decimal places.) (c) Consider a large shipment of 400 refrigerators, of which 40 have defective compressors. If X is the number among 25 randomly selected refrigerators that have defective compressors, describe a less tedious way to calculate (at least approximately)…
- T2 #4 Apr 5 Of the international passengers arriving at an airport, 1.5% are selected for luggage inspection. Let X be the number of passengers from a random sample of 400 who are sent for luggage inspection. Use Poisson approximation to X to find the probability that between 6 and 12 passengers inclusive, are sent for luggage inspection.Let X1 and X2 be independent random variables; X1 ∼ Poisson(2); X2 ∼ Poisson(3). Compute E(X1|X1 +X2 = 10).Let U1, ....U5 be independent and standard uniform distibuted random variables given by P(U1 ≤ x) = x, 0 < x < 1 1. Compute the moment generating function E(e sU ) of the random variable U1. 2. Compute the moment generating function of the random variable Y = aU1 + U2 + U3 + U4 + U5 with a > 0 unknown. 3. Compute E(Y ) and V ar(Y ). 4. As an estimator for the unknow value θ = a we migth use as an estimator θb = 2 n Xn i=1 Yi − 4 = 2Y − 4. with Yi independent and identically distributed having the same cdf as the random variable Y discussed in part 2. Compute E(θb) and V ar(θb) and explain why this estimator is sometimes not very useful. 5.Give an upperbound on the probability P(| θb− a |> ) for every > 0.(Hint:Use Chebyshevs inequality!)