Discrete Random Variables - Variance (with Excel) and Shape
Spread for Discrete Random Variables
Spread of a random variable is also important to know to understand how different outcomes are likely to be from our expectation.
To measure this spread, we re-introduce variance and standard deviation. Our equations for calculating them have changed a little from before, but the principles are the same. While skewness might still be important, we can assess this visually as shown by Adrian.
We now have tools for calculating expectation and variance for discrete random variables, with a bit of help from Excel. We can also inspect shape by considering the skewness of our data visually. Now that we have these, we can move onto our final practical topic for this course, where we use these measures to make a business decision involving random variables.
Before we move on let’s check in.
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