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Unformatted text preview: Exam Formulas Page Economics 310 Spring 2011 & Location of a percentile: L p = ( n + 1) P 100 & Probability of the union of two events P ( A [ B ) = P ( A ) + P ( B ) P ( A \ B ) & Total Probability Rule: Let B 1 ;:::;B n be a partition of S . For any event A S , P ( A ) = n X i =1 P ( A \ B i ) & Bayes Rule: Let B 1 ;:::;B n be a partition of S . If these events all have positive probability, then for any event A S : P ( B i j A ) = P ( A j B i ) P ( B i ) P n j =1 P ( A j B j ) P ( B j ) & Covariance for discrete random variables X , Y : Cov ( X;Y ) = X x X y ( x E ( X ))( y E ( Y )) P ( X = x;Y = y ) & Cov ( aX + b;cY + d ) = acCov ( X;Y ) & Two asset portfolio choice - Backward bending feasible set condition: Cov ( R 1 ;R 2 ) < min f V ar ( R 1 ) ;V ar ( R 2 ) g & Factorial: N ! = 1 x 2 x 3 x ... x N . Moreover, 0! = 1 . & Binomial Coe cients: & n k = n ! k !( n k )!...
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- Spring '09