Question 11 Mark
If x1, x2, ..., xn are n values of a variable X and y1, y2, ..., yn are n values of variable Y such that yi = axi + b, i = 1, 2, ..., n, then write Var(Y) in terms of Var(X).
Answer
View full question & answer→$\overline{\text{Y}}=\frac{1}{\text{n}}\Big\{\sum\text{y}_\text{i}\Big\}=\frac{1}{\text{n}}\Big\{\sum\text{ax}_\text{i}+\text{b}\Big\}=\text{a}\overline{\text{x}}+\text{b}$
$\therefore\text{y}_\text{i}-\overline{\text{y}}=\text{ax}_\text{i}+\text{b}-\text{a}\overline{\text{x}}-\text{b}=\text{a}(\text{x}_\text{i}-\overline{\text{x}})$
$\text{Var}(\text{Y})=\frac{1}{\text{n}}\Big\{\sum(\text{y}_\text{i}-\overline{\text{y}})^2\Big\}=\frac{1}{\text{n}}\Big\{\sum\text{a}^2(\text{x}_\text{i}-\overline{\text{x}})^2\Big\}\\=\text{a}^2\Big[\frac{1}{\text{n}}\big\{(\text{x}_\text{i}-\overline{\text{x}})^2\big\}\Big]=\text{a}^2\big[\text{Var}(\text{X})\big]$
$\therefore\text{y}_\text{i}-\overline{\text{y}}=\text{ax}_\text{i}+\text{b}-\text{a}\overline{\text{x}}-\text{b}=\text{a}(\text{x}_\text{i}-\overline{\text{x}})$
$\text{Var}(\text{Y})=\frac{1}{\text{n}}\Big\{\sum(\text{y}_\text{i}-\overline{\text{y}})^2\Big\}=\frac{1}{\text{n}}\Big\{\sum\text{a}^2(\text{x}_\text{i}-\overline{\text{x}})^2\Big\}\\=\text{a}^2\Big[\frac{1}{\text{n}}\big\{(\text{x}_\text{i}-\overline{\text{x}})^2\big\}\Big]=\text{a}^2\big[\text{Var}(\text{X})\big]$