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variance of return question

B

barney

Member
hi there

sept 2005, question 1, U has a uniform distribution and then it's quite easy to see that R also has a uniform distribution and its parameters.

but then september 2006, question 1 why can't you do the following:

N= 1 so R = 250,000 - 100,000(1) = 150,000
So R has a normal distribution with parameters (150,000 , 150,000)??

Thanks !
 
em

its normal ( 150,000 , 100,000 )

its variance is the variance of the normal ( 1 , 1 ) times 100,000^2
as calculated in part (i)

the mean has moved by 250,000 so instead of being normal(-100,000,100,000)
its as stated above.

the mean and variance have nothing to do with each for the normal (independent they are)
whereas that cant be said about the uniform or the possion or many other distributions

this isnt the clearest explanation Ive ever given , let me know if ya get it or if ya dont ill try explain again
 
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