Lecture 14

Expected Values of Random Variable: We use the average to summarize or characterize the entire
collection of numbers a1, . . . ,an with a single typical value. Random variables also have means but
their means are not calculated by simply adding up the different variables. The mean of a random variable
is more commonly referred to as its Expected Value, i.e. the value you expect to obtain should you carry
out some experiment whose outcomes are represented by the random variable.
The expected value of a random variable X is denoted by E(X). Given that the random variable X is
discrete and has a probability distribution f(x), the expected value of the random variable is given by:

=E ( X )= xf ( x )
x

Given that the random variable X is continuous and has a probability distribution f(x), the expected value
of the random variable is given by:

=E ( X )= xf ( x ) dx

Example: The probability distribution of X, the number of red cars John meets on his way to work each
morning, is given by the following table:
x

f(x)

0.41

0.37

0.16

0.05

0.05

Find the number of red cars that John expects to run into each morning on his way to work.
Solution: This question is asking us to find the average number of red cars that John runs into on his way
to work. What makes this different from an ordinary mean question is that the odds (probability) of
running into a given number of cars are not the same.
Since X is a discrete random variable, the expected value is given by:

Although you wouldn't expect to run into 0.88 cars, let's pretend that the above is multiplied by 100 to get
the actual number of cars that John comes across on his way to work.
Example: A certain software company uses a certain software to check for errors on any of the programs
it builds and then discards the software if the errors found exceed a certain number. Given that the number
of errors found is represented by a random variable X whose density function is given by

Find the average number of errors the company expects to find in a given program.
Solution: The random variable X is given as a continuous random variable, thus its expected value can be
found as follows:

The company should expect to find approximately 14.93 errors.

Example: A lot containing 7 components is sampled by a quality inspector; the lot contains 4 good
components and 3 defective components. A sample of 3 is taken by the inspector. Find the expected value
of the number of good components in this sample.

Solution: Let X represent the number of good components in the sample. The probability distribution of
X is

Simple calculations yield f(0) = 1/35, f(1) = 12/35, f(2) = 18/35, and f(3) = 4/35. Therefore,

Thus, if a sample of size 3 is selected at random over and over again from a lot of 4 good components and
3 defective components, it will contain, on average, 1.7 good components.
Example: A salesperson for a medical device company has two appointments on a given day. At the first
appointment, he believes that he has a 70% chance to make the deal, from which he can earn $1000
commission if successful. On the other hand, he thinks he only has a 40% chance to make the deal at the
second appointment, from which, if successful, he can make $1500. What is his expected commission
based on his own probability belief? Assume that the appointment results are independent of each other.
Solution: First, we know that the salesperson, for the two appointments, can have 4 possible commission
totals: $0, $1000, $1500, and $2500. We then need to calculate their associated probabilities. By
independence, we obtain

Therefore, the expected commission for the salesperson is