2-2-09 - a Definitions – a Sample Mean b Sample Variance...

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Economic Statistics – Class Notes – 2/2/09 From exercise on 1/30/09: Average = standard For FRIDAY (everything we did on 1/28/09 and 1/30/09): Proof for Rules of Expectation (#1-6) o These are all based on summation Direct Applications o Know the examples of these direct applications Standardizing a random variable and showing that the expectation of “Z” = 0 and that the variance of Z = 1 Expected value and variance of functions of random variables: o E(X + Y) etc.
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Example – Rules of Expectation: Direct Application versus Proof USING THE PROOF:
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7. The Covariance and the Correlation Coefficient
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Unformatted text preview: a.) Definitions – a. Sample Mean: b. Sample Variance: c. Sample Covariance: Examples of related variables: • Height and Weight • Education levels and incomes o More education = more income • GDP and consumption • Investment and interest rate The sample covariance is used to estimate the population variance: Question: How does the sample covariance determine whether a direct, indirect, or no relation exists between the random variable X and the random variable Y? Answer: QUIZ FRIDAY!...
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This note was uploaded on 06/03/2009 for the course ECON 203 taught by Professor Casler during the Spring '09 term at Allegheny.

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2-2-09 - a Definitions – a Sample Mean b Sample Variance...

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