Excel + formulas Spreard 6. Given A, B, and C, which are uncorrelated random var

Question

Excel + formulas

Spreard 6. Given A, B, and C, which are uncorrelated random variables. Variable A is with u = 100 and o? = 400. Variable B is discrete uniformly distribute distribution given by p(b) = 1/5 with b = 0, 1, 2, 3 and 4. Variable Cis die with the following table: te A is normally distrik ributed with a probab is distributed in accord. Value of C Probability 10 .10 .25 30 .50 40 20 .15 Use simulation to estimate the mean of a new variable D, that is defined as D = (A - 25B)/(2C) Use a sample of size 100.

Explanation / Answer

Mean of A = 100

Mean of B = 1/5(1+2+3+4+0)=2

Mean of C = 10*0.1+20*0.25+30*0.5+40*0.15 = 1+5+15+6 = 27

Mean of D = (100-25*2)/(2*27) = 50/54=0.9259

Same result can be obtained by using a simulation.

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