Homework SourseA CPA studies the number of exemptions claimed on tax return
A CPA studies the number of exemptions claimed on tax returns. The data are summarized in the following table.
Exemptions
Percent
1
20
2
50
3
20
4
10
a. What is the mean number of exemptions claimed? b. What is the variance of the number of exemptions claimed?
| Exemptions | Percent |
| 1 | 20 |
| 2 | 50 |
| 3 | 20 |
| 4 | 10 |
Solution
Consider:
a)
Thus,
E(x) = Expected value = mean = 2.2 [ANSWER]
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b)
Var(x) = E(x^2) - E(x)^2 = 0.76 [ANSWER]
| x | P(x) | x P(x) | x^2 P(x) |
| 1 | 0.2 | 0.2 | 0.2 |
| 2 | 0.5 | 1 | 2 |
| 3 | 0.2 | 0.6 | 1.8 |
| 4 | 0.1 | 0.4 | 1.6 |
