Quantitative Methods Q182

182The joint probabilities for X and Y are P(X=10, Y=5) = 0.3, and P(X=20, Y=8) = 0.7. The covariance of XY is closest to:

Option : C
Explanation : The joint probabilities in the question are given as follows:
X, Y 5 8
10 0.3
20 0.7
E(X) = 0.3 (10) + 0.7 (20) = 17
E(Y) = 0.3 (5) + 0.7 (8) = 7.1
Cov (XY) = 0.3 (10 - 17) (5 - 7.1) + 0.7 (20 - 17) (8 - 7.1) = 6.3

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