G
gcpgcp
Member
Q&A - Part 2, Q 2.15
E(S) = ∑ n b q
Var(S) = ∑ n b^2 q (1-q)
why ? I am totally clueless ...
E(S) = ∑ n b q
Var(S) = ∑ n b^2 q (1-q)
why ? I am totally clueless ...
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G
gcpgcp
Member
Anyone ?
Busy_Bee4422
Ton up Member
Background logic
Did this a while back but I think I get the type of question you are asking.
Your question has a portfolio which is the sum of two or more aggregate distributions. From the expressions u have written I presume they are each compound binomial. Therefore the overall mean for the whole portfolio is the sum of the mean of each group. The mean of each group is found using the textbook formula for an aggregate distribution. Same works for the variance. Remember they are independent.
Happy reading!
Did this a while back but I think I get the type of question you are asking.
Your question has a portfolio which is the sum of two or more aggregate distributions. From the expressions u have written I presume they are each compound binomial. Therefore the overall mean for the whole portfolio is the sum of the mean of each group. The mean of each group is found using the textbook formula for an aggregate distribution. Same works for the variance. Remember they are independent.
Happy reading!