I thought I had a good understanding of EBCT models but on part (iii) (b) I am struggling to see where the variance of 1/12 has come from? (I am looking at the answer in the revision books). Thanks!!
\( \lambda \) has a U(0,1) distribution. So from page 13 of the Tables the variance is \( \frac{1}{12} (1-0)^2 \)
Ahh I failed to link the f(x)=1 with the uniform distribution and was thinking of it as a constant (making the variance equal to 0)! Thanks John
