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If f(x,y) is the joint probability density function then the marginal pdf of X is defined as
And the marginal pdf of Y is defined as
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- Repeat Example 5 when microphone A receives the sound 4 seconds before microphone B.EX7.8) Let Y be a random variable having a uniform normal distribution such that Y U(2,5) 2 Find the variance of random variable Y.(b) Let X₁, X₂, X3 be uncorrelated random variables, having the same variance ². Consider the linear transformations Y₁ = X₁ + X₂, Y₂ = X₁ + X3 and Y3 = X₂ + X3 . Find the correlations of Yi, Y; for i #j. (5 marks)
- Q2: (b) Let X₁, X2, X3 be uncorrelated random variables, having the same variance o². Consider the linear transformations Y₁ = X₁ + X₂, X2 + X3. Find the correlations of Y₁, Y; i, Y₂ = X₁ + X3 and Y3 for i + j. =There are only two states of the world, when a person is well with probability (1-p) and ill with probability p, where (1-p)= 1/3 and p = 2/3. Consider Adam who has utility function U = (Y1, Y2,1 – p,p) = Y,"-P)Y?, where Y; is the income and i =1 is well and i = 2 is ill. When Adam is well, he earns $1000, but when he is ill, he losses $300 in health expenditures and earnings such that Y2 = $700. What is the maximum total premium that Adam is still willing-to-pay? (1-р).5. In a large class, the instructor ran a regression with the independent variable(x) as the gradc on the first cxam and the dependent variable(y) bcing the grade on the second exam She found the cquation to be: Y 29.25+57X Knowing that your friend got a 78 on the first cxam, what value would you predict she got on the socond exam? a) 71.43 b) 72.57 c) 78.00 d) 73.71 6. A test result is one that detects the condition when the condition is present is called. a) Truc Negative b) False positive c) Sensitivity d) True Positive 7. A test result is one that detects the condition when the condition is absent is called. a) True Negative b) False positive c) Sensitivity d) True Positive IN 8. The proportion of positives that correspond to the presence of the condition is called The formula is TN+FP a) Specilicity b) Predictive value positive c) Sensitivity dy Predictive valuc negalivc
- Let fix) = 2x, 0= B1. Let X₁ and Y; be random variables with Var(X;) = o² and Var(Y₂) o for all ie {1,...,n}. Assume that each pair (X₁, Y;) has correlation Corr(X, Y) = p, but that (X₁, Y₂) and (X₁, Y;) are independent for all i j. (a) What is Cov(X₁, Yi) in terms of Ox, Oy (b) Show that Cov(X₁,Y) = poxoy/n, where Y is the average of the Y₁. (c) Determine Cov(X, Y). and p?Consider the following structural model: 31 Bo + B1y2 + B₂²1 +21 Suppose now that there are two exogenous variables excluded from the model: 22 and 23. The assumptions that 2₂ and 23 do not appear in the model and are uncorrelated with the error ₁ are known as The linear combination that is most highly correlated with y2 is given by the reduced form equation for y2: Y2 = πO +1Z1 +T2Z2 + N3Z3+V2 E(v2) = 0, Cov(21, v2) = 0, Cov(22, 2) = 0, and Cov(23, 12) = 0. overidentifying restrictions exclusion restrictions 2SLS rank conditions