Easy econometrics question (1 Viewer)

[Wolfowitz]

What's the formula for finding the variance of a discrete random variable.

Also what is linear combination in relation to random variables?

 

[pikachufkr]

late reply but:

Where X is a random variable (continuous or discrete)

Var(X) = E(X^2) - {E(X)}^2


Where X1, X2, X3..........Xn are random variables, a linear combination would be:

aX1 + bX2 + cX3 + ...... kXn

where a, b, c, ....k are real numbers.