a. Draw a line graph of the pmf of X in Exercise 35. Then determine the pmf of –X and draw its line graph. From these two pictures, what can you say about V(X) and V(- X)?
b. Use the proposition involving V( aX = b) to establish a general relationship between V(X) and V( -X).
Reference exercise -35
A small market orders copies of a certain magazine for its magazine rack each week. Let X = demand for the magazine, with pmf
Suppose the store owner actually pays $2.00 for each copy of the magazine and the price to customers is $4.00. If magazines left at the end of the week have no salvage value, is it better to order three or four copies of the magazine? [Hint: For both three and four copies ordered, express net revenue as a function of demand X, and then compute the expected revenue.]
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