X Y

E(X) 10 E(Y) 15
SD(X) 12 SD(Y) 16
A 0.8 B 0.2

(r=0) Z=0.8X+0.2Y (r=0) Z=0.8X+0.2Y

E(Z) 11 E(Z) 11
VAR(Z) 102.4 VAR(Z) 102.4
SD(Z) 10.1192885 SD(Z)

X 10 20 50 100
P(x) 0.2 0.5 0.2 0.1

a) 0.3
b) 32
c) The expected value is the average of all outcomes in the long r
d) 696

SD(X)
X =Profit P(X) EX Var(X) SD(X)
0 0.05 25000 175000000 13228.7566
20000 0.75
50000 0.2
E(X) 64
E(Y) 120
Z=Total number of wks 64
a) E(Z) 184
b) Positive Correlation
c) 387
d) 19.6723156
 X & Y are independent(R=0)

SUM
180
1

erage of all outcomes in the long run, it's not a value for one customer

SD(X) 6
SD(Y) 15
 Apple Cisco
E(X) 8% E(Y) 15%
SD(X) 12% SD(Y) 22%
A 25% B 75%

(r=0) Z=0.25X+0.75Y (r=1) Z=0.8X+0.2Y

E(Z) 13% E(Z) 13%
VAR(Z) 3% VAR(Z) 3%
SD(Z) 17% SD(Z) 18%
 X & Y are independent(R=0)

(r=-0.5) Z=0.8X+0.2Y
E(Z) 13%
VAR(Z) 3%
SD(Z) 16%
 E(X) 64.00 E(Y)
SD(X) 6.00 SD(Y)
A B

Z=aX+bY
a b E(aX+bY) Var(aX+bY) SD(aX+bY) SR(aX+bY)
0 1 120.000 225.00 15 7.953333
1 64 7,744.000 921,636.00 960.018749817 8.065780
2 32 3,968.000 230,544.00 480.14997657 8.262627
4 16 2,176.000 58,176.00 241.197014907 9.018768
8 8 1,472.000 16,704.00 129.243955371 11.383898
16 4 1,504.000 12,816.00 113.207773585 13.279123
120.00 Rf 0.7
15.00