Problem Set 2: Random Variables & Discrete

Probability Distributions
Based on Session 5 — Random Variables, PMF, CDF, Expectation & Variance

Concepts covered in this problem set

● Probability mass function (PMF): validity conditions — 0 ≤ f(x) ≤ 1 and Σf(x) = 1
● Cumulative distribution function (CDF): F(x) = P(X ≤ x)
● Expectation of a random variable: E(X) = Σ x·f(x)
● Expectation of a function of a random variable: E(g(X)) = Σ g(x)·f(x)
● Variance: Var(X) = E(X²) − [E(X)]²
● Discrete uniform distribution and its mean/variance
● Linear transformations of a random variable, E(aX+b) and Var(aX+b)

Difficulty mix: Questions 1–4 are conceptual / direct-application, Questions 5–7 test medium concept depth, and
Questions 8–10 are the most challenging, often combining multiple ideas.
Problems
Question 1 [Conceptual / Direct]
A discrete random variable X has possible values {1, 2, 3, 4} with probability function:
f(1) = 0.15, f(2) = 0.30, f(3) = k, f(4) = 0.25
(a) Find the value of k that makes f(x) a valid PMF.
(b) State the two conditions any valid PMF must satisfy, and confirm your value of k meets them.

Question 2 [Conceptual / Direct]

Using the PMF from Question 1 (with k = 0.30): f(1)=0.15, f(2)=0.30, f(3)=0.30, f(4)=0.25.
(a) Find the CDF value F(2) = P(X ≤ 2).
(b) Find P(X ≥ 3).
(c) Find P(1 < X ≤ 3).

Question 3 [Conceptual / Direct]

A fair eight-sided die (faces 1 through 8, each equally likely) is rolled once. Let X denote the outcome.
(a) Identify the distribution of X and write its PMF.
(b) Find E(X) using the discrete uniform mean formula (the average of all the possible values).

Question 4 [Conceptual / Direct]

A random variable X has the PMF:
x 0 1 2 3
f(x) 0.10 0.35 0.40 0.15
(a) Find E(X).
(b) Find E(X²).
(c) Find Var(X) using Var(X) = E(X²) − [E(X)]².

Question 5 [Medium]
A street vendor sells umbrellas. On a given day, the number sold, X, has this distribution based on past data:
x 0 1 2 3 4
f(x) 0.10 0.20 0.35 0.25 0.10
Each umbrella sold earns a profit of ₹150.
(a) Find the expected number of umbrellas sold per day, E(X).
(b) Find the expected daily profit, using the fact that profit = 150X is a function of X.
(c) Briefly interpret what E(X) means in the long run.

Question 6 [Medium]
Let X have PMF: f(−1) = 0.2, f(0) = 0.5, f(1) = 0.3. Define Y = X² + 2X + 3.
(a) Find the possible values of Y and their probabilities (i.e., derive the PMF of Y).
(b) Find E(Y) directly from the PMF of Y you found in (a).
(c) Verify your answer using E(g(X)) = Σ g(x)·f(x).
Question 7 [Medium]
A biased coin has P(Heads) = 0.6. It is tossed twice, and X = number of heads obtained.
(a) Derive the PMF of X for x = 0, 1, 2 by considering all outcome combinations (do not just quote the Binomial
formula — build it up directly, as in the two-toss coin example from class).
(b) Write the CDF F(x) for all real x.
(c) Compute E(X) and Var(X) directly from the PMF you derived.

Question 8 [Hard]
The CDF of a discrete random variable X is given by:
F(x) = 0 for x<2; F(x) = 0.20 for 2≤x<5; F(x) = 0.55 for 5≤x<9; F(x) = 0.80 for 9≤x<12; F(x) = 1.00 for x≥12.
(a) Identify the possible values of X and recover its PMF f(x) from the jumps in the CDF.
(b) Compute E(X) and Var(X).

Question 9 [Hard]
Two investment schemes give random returns (in ₹ thousands):
Scheme A: x = 2, 5, 8 with f(x) = 0.5, 0.3, 0.2
Scheme B: x = 4, 5, 6 with f(x) = 0.25, 0.50, 0.25
(a) Find E(X) for both schemes. Which has the higher expected return?
(b) Find Var(X) for both schemes. Which scheme is riskier?
(c) A broker charges a flat fee of ₹0.5 thousand and takes 10% of the gross return, so the net return is Y = 0.9X −
0.5. Find E(Y) and Var(Y) for Scheme A using the linear transformation properties.

Question 10 [Hard]
Let X have a discrete uniform distribution over S = {a₁, a₂, ..., aₙ}, so f(x) = 1/n for each x in S. We know E(X) = ā
(the average of the values) and E(X²) = (1/n)Σaᵢ².
(a) Write a general expression for Var(X) in terms of E(X²) and ā.
(b) Apply your formula to find Var(X) when X is equally likely to take any value in S = {2, 4, 6, 8, 10}.
Solutions
Solution to Question 1
(a) A valid PMF must sum to 1 over its support: 0.15 + 0.30 + k + 0.25 = 1 ⇒ 0.70 + k = 1 ⇒ k = 0.30.
(b) Conditions: (i) 0 ≤ f(x) ≤ 1 for every x, and (ii) Σf(x) = 1 across the whole sample space. Here k = 0.30 lies in
[0,1] and the total is exactly 1, so the PMF is valid.

Solution to Question 2
(a) F(2) = f(1) + f(2) = 0.15 + 0.30 = 0.45
(b) P(X ≥ 3) = f(3) + f(4) = 0.30 + 0.25 = 0.55 (equivalently, 1 − F(2) = 1 − 0.45 = 0.55)
(c) P(1 < X ≤ 3) = f(2) + f(3) = 0.30 + 0.30 = 0.60

Solution to Question 3
(a) X follows a Discrete Uniform distribution on S = {1,2,...,8}, with f(x) = 1/8 for x = 1,...,8.
(b) E(X) = (1+2+3+4+5+6+7+8)/8 = 36/8 = 4.5

Solution to Question 4
(a) E(X) = 0(0.10)+1(0.35)+2(0.40)+3(0.15) = 0 + 0.35 + 0.80 + 0.45 = 1.60
(b) E(X²) = 0²(0.10)+1²(0.35)+2²(0.40)+3²(0.15) = 0 + 0.35 + 1.60 + 1.35 = 3.30
(c) Var(X) = 3.30 − (1.60)² = 3.30 − 2.56 = 0.74

Solution to Question 5
(a) E(X) = 0(.10)+1(.20)+2(.35)+3(.25)+4(.10) = 0+0.20+0.70+0.75+0.40 = 2.05
(b) E(Profit) = E(150X) = 150·E(X) = 150 × 2.05 = ₹307.50
(c) Over many days, the average number of umbrellas sold per day will settle close to 2.05, and correspondingly the
average daily profit will settle close to ₹307.50 — this is the long-run interpretation of expectation.

Solution to Question 6
Compute g(x) = x²+2x+3 at each value of X: g(−1) = 1−2+3 = 2; g(0) = 0+0+3 = 3; g(1) = 1+2+3 = 6.
(a) Since these three g(x) values are distinct, Y's PMF is: f_Y(2)=0.2, f_Y(3)=0.5, f_Y(6)=0.3.
(b) E(Y) = 2(0.2)+3(0.5)+6(0.3) = 0.4+1.5+1.8 = 3.7
(c) E(g(X)) = Σg(x)f(x) = 2(0.2)+3(0.5)+6(0.3) = 3.7. Matches part (b), as it must, since Y and g(X) are the same
random variable viewed two ways.

Solution to Question 7
(a) P(X=0) = (1−p)² = (0.4)² = 0.16. P(X=1) = 2p(1−p) = 2(0.6)(0.4) = 0.48. P(X=2) = p² = (0.6)² = 0.36. (Check:
0.16+0.48+0.36 = 1.00 ✓)
(b) F(x) = 0 for x<0; F(x) = 0.16 for 0≤x<1; F(x) = 0.64 for 1≤x<2; F(x) = 1 for x≥2.
(c) E(X) = 0(.16)+1(.48)+2(.36) = 0.48+0.72 = 1.20. E(X²) = 0(.16)+1(.48)+4(.36) = 0.48+1.44 = 1.92. Var(X) =
1.92 − (1.20)² = 1.92 − 1.44 = 0.48.

Solution to Question 8
(a) The CDF jumps at x = 2, 5, 9, 12 — these are the support values. The size of each jump is the probability at that
point:
f(2) = 0.20−0 = 0.20; f(5) = 0.55−0.20 = 0.35; f(9) = 0.80−0.55 = 0.25; f(12) = 1.00−0.80 = 0.20. (Check: sum =
1.00 ✓)
(b) E(X) = 2(.20)+5(.35)+9(.25)+12(.20) = 0.4+1.75+2.25+2.4 = 6.80
E(X²) = 4(.20)+25(.35)+81(.25)+144(.20) = 0.8+8.75+20.25+28.8 = 58.60
Var(X) = 58.60 − (6.80)² = 58.60 − 46.24 = 12.36

Solution to Question 9
Scheme A: E(X) = 2(.5)+5(.3)+8(.2) = 1+1.5+1.6 = 4.1. E(X²) = 4(.5)+25(.3)+64(.2) = 2+7.5+12.8 = 22.3. Var(A) =
22.3 − 4.1² = 22.3−16.81 = 5.49.
Scheme B: E(X) = 4(.25)+5(.50)+6(.25) = 1+2.5+1.5 = 5.0. E(X²) = 16(.25)+25(.50)+36(.25) = 4+12.5+9 = 25.5.
Var(B) = 25.5 − 5.0² = 25.5−25 = 0.5.
(a) E(A) = 4.1, E(B) = 5.0 — Scheme B has the higher expected return.
(b) Var(A) = 5.49 versus Var(B) = 0.5 — Scheme A is far riskier, despite its lower expected return.
(c) For Scheme A: E(Y) = 0.9·E(X) − 0.5 = 0.9(4.1)−0.5 = 3.69−0.5 = 3.19. Var(Y) = (0.9)²·Var(X) = 0.81 × 5.49 =
4.4469.

Solution to Question 10
(a) Var(X) = E(X²) − [E(X)]² = (1/n)Σaᵢ² − ā² — this is just the general variance formula specialised to the discrete
uniform case.
(b) n = 5. ā = (2+4+6+8+10)/5 = 30/5 = 6. Σaᵢ² = 4+16+36+64+100 = 220, so E(X²) = 220/5 = 44.
Var(X) = 44 − 6² = 44 − 36 = 8.