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.]
Solution : Step 1 : Here the market orders copy of a certain magazine for its magazine racks in each week is given. If X= demands for the magazine, with pmf We have draw graph for X and -X and also by using the proposition we have to find the relationship between V(X) and V(-X).