Senior High School

Statistics and Probability

Second Semester (Midterm) – Module 3.2
Solves Problems Involving Mean and Variance
of Probability Distributions

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 Senior High School

Statistics and Probability

Second Semester (Midterm) – Module 3.2
Solves Problems Involving Mean and Variance
of Probability Distributions

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Introductory Message

For the facilitator:

Welcome to the Statistics and Probability Self-Learning Module on Solves
Problems Involving Mean and Variance of Probability Distributions!
This module was collaboratively designed, developed and reviewed by educators
both from public and private institutions to assist you, the teacher or facilitator in helping
the learners meet the standards set by the K to 12 Curriculum while overcoming their
personal, social, and economic constraints in schooling.
This learning resource hopes to engage the learners into guided and
independent learning activities at their own pace and time. Furthermore, this also aims
to help learners acquire the needed 21st century skills while taking into consideration
their needs and circumstances.
In addition to the material in the main text, you will also see this box in the body
of the module:

Notes to the Teacher

This contains helpful tips or strategies that will

help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this module. You
also need to keep track of the learners' progress while allowing them to manage their
own learning. Furthermore, you are expected to encourage and assist the learners as
they do the tasks included in the module.

For the learner:

Welcome to the Statistics and Probability Self-Learning Module on Solves
Problems Involving Mean and Variance of Probability Distributions!
This module was designed to provide you with fun and meaningful opportunities for
guided and independent learning at your own pace and time. You will be enabled to
process the contents of the learning resource while being an active learner.

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 Solves Problems Involving Mean and
Variance of Probability Distributions
CONTENT STANDARD
The learner demonstrates an understanding of key concepts of random variables
and probability distributions.

PERFORMANCE STANDARD
The learner is able to apply an appropriate random variable for a given real-life
problem (such as in decision making and games of chance).

LEARNING COMPETENCY
Solves problems involving mean and variance of probability distributions.
( M11/12SP-lllb-4)

LEARNING OBJECTIVES:
1. Calculate the mean and variance of the discrete random variable.
2. Appreciate the importance of the mean and the variance of the discrete
random variable in real-life problems.
3. Solve problems involving the mean and variance of a probability distribution

INTRODUCTION

The mean and variance of a discrete random variable are necessary for
everyday living. To name a few, it guides us to make the correct decision and to discern
the chance of winning in a game of chance. In this lesson, we will now embark on the
practical application of the mean and variance of a discrete random variable.

REVIEW OF THE PREVIOUS MODULE

In the previous lesson, you have learned to interpret the obtained mean and
variance of a given problem. As a review, try to interpret the problem given in the
enrichment part in module 3.1.

Problem: One thousand tickets are sold at P1 each for four prizes of P100, P50, P25,
and P10. What is the expected value if a person purchases three tickets?
Expected Value: -P2.4
Question: What does an expected value of -P2.4 imply to the problem?
Interpretation:

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PRESENTATION OF THE NEW MODULE

The expected value of a discrete random variable allows us to decide where to

put our bet. For example, in a gamble game, if the expected of the game is zero, the
game is said to be fair. If the expected value of the game is positive, then the game is in
favor of the player. That is, the player has a better-than-even chance of winning. If the
expected value of the game is negative, then the game is said to be in favor of the
house. That is, in the long run, the player will lose money.

The expected value of a discrete random variable also allows us to predict

something. In business, for instance, the expected value of the number of suits sold per
day in a retail store is 20.8; this means that, in the long run, the average number of suits
sold per day is 20.8. If the owner wants to be sure that she has enough suits for the
next 5 days, the manager should purchase 24 suits (20.8x5=24).

To start this module, do the activity prepared for you below.

ACTIVITY

Suppose Sophie own a coffee shop for a very long time now and her observation
is always accurate about the number of customers per day. The number of customers
per day and their corresponding probability is shown below.

Number of Customers X 50 51 52 53 54
Probability P(X) 0.10 0.20 0.37 0.21 0.12

Sophie is struggling in her business for some reason, and you want to help
Sophie in deciding by getting first the expected value. Help Sophie by writing your
answers in the box.

Sophie, the expected value is _____. This means that _____________________________

________________________________________________________________________
________________________________________________________________________

ANALYSIS

1. If the coffee shop Sophie can only accommodate 52 customers per day, does it
mean that Sophie needs to expand or stock more ingredients in her business?
Why?

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ABSTRACTION

In solving problems involving the expected value or mean and variance of a

discrete random variable, we can follow the 4-step rule “EPSI”. EPSI stands for explore,
plan, solve and interpret.

Explore. This step involves careful reading and analyzing the problem. Given and
unknown data should be identified.
Plan. This step requires you to make a probability distribution either in the form of a
table, graph, or equation. Formulas needed to obtain the answer to the problem are set
in this step. If probability distribution is already given, you may disregard making it.
Solve. This step seeks answer/s to the problem.
Interpretation. This is the final step that makes sense of your answer/s.

Let us take the following examples.

Example 1.

To raise funds for the construction of its School Alumni Building, the Batch 1991
of Alegria NHS decided to conduct a fundraising campaign. Two hundred tickets are up
for sale. Only one ticket wins P5,000 as the only price while the other tickets will win
nothing. If Mary Aramie will buy one ticket that costs P5.00, what will be her expected
gain?

Solution:

Step 1. Explore

In the problem, there are 200 tickets, only one of these tickets has a prize of
P5,000.00 and the cost of each ticket is P5.00. The problem asked for the expected
gain Mary Aramie can have who bought only one ticket.

Step 2. Plan

From the given data above, the probability distribution would be

X P(X)
1
P4,995
200
199
- P5
200

Since the problem asked for the expected mean, we will use the formula for the
expected which is 𝐸 (𝑋) = ∑ 𝑋 • 𝑃(𝑋).

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Step 3. Solve

Using the probability distribution and the formula of the expected value in step 2,
the expected value would be,

1 199
𝐸(𝑋) = ∑ 𝑋 • 𝑃(𝑋) = 𝑃4,995 ( ) + (−𝑃5) ( ) = 𝑃20
200 200

Step 4. Interpretation

If this activity will be repeated many times, Mary Aramie will gain P20.

Example 2.

Von Paul and his father Romeo play by tossing an unbiased coin. Romeo gives
Von Paul P50 if a head appears and P30 if it lands tail. What are the expected value
and the variance of his gain?

Step 1. Explore

The activity in the problem is tossing a coin, if it lands head Romeo will give P50
to Von Paul. On the other hand, Romeo will give P30 to Von Paul if the coin will land
tail. The problem asked for the expected value and the variance of Von Paul’s gain.

Step 2. Plan

From the given data above, the probability distribution would be

Gain
P(X)
X
1
-P30
2
1
P50
2
Since the problem asked for the expected mean and the variance, we will use
the formula for the expected 𝐸 (𝑋) = ∑ 𝑋 • 𝑃(𝑋) and variance 𝜎 2 = 𝛴[𝑋 2 · 𝑃(𝑋)] − 𝜇 2.

Step 3. Solve

Using the probability distribution and the formulas in step 2,

1 1
𝐸 (𝑋) = ∑ 𝑋 • 𝑃 (𝑋) = − 𝑃30 ( ) + 𝑃50 ( ) = 𝑃10
2 2

1 1
𝜎 2 = [(−𝑃30)2 ( ) + (𝑃50)2 ( )] − (𝑃10)2 = 𝑃1600
2 2

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Step 4. Interpretation

With the expected value of P10, this means that Von Paul will have a gain of P10
when this activity is continued infinitely many times. Moreover, the variance of P1600
will tell us that the data are not clustered around the mean.

Example 3.

A manager of a bank company feels that each savings account each customer
has, on average, three credit cards. The following distribution represents the number of
credit cards people own. Is the manager correct?

Number of Cards
0 1 2 3 4
X
Probability P(X) 0.18 0.44 0.27 0.08 0.03

Step 1. Explore

The manager of the bank company claims that each savings account of each
customer has three credit cards. The problem asked if this claim is correct.

Step 2. Plan

Since probability distribution is already given, we will make use of it. Expected
value or the mean plays a great role in this problem because it talks about average.
Hence, the formula for the expected 𝐸(𝑋) = ∑ 𝑋 • 𝑃(𝑋) will be used.

Step 3. Solve

Using the probability distribution and the formulas in step 2,

𝐸 (𝑋) = ∑ 𝑋 • 𝑃 (𝑋) = 0(0.18) + 1(0.44) + 2(0.27) + 3(0.08) + 4(0.03) = 1.34

Step 4. Interpretation

The expected value of 1.34 rejects the claim of the manager that each savings
account of each customer has three credit cards.

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APPLICATION
Heritage Finance Corporation, as a car insurance company, offers an amount of
P600,000 for a damaged car beyond repair in an accident. Marco, a client costs him to
pay Php 25,000 yearly and the probability that the company will pay the amount of
insurance is 0.003.

A. What is the probability that the company will NOT pay any amount to its client
within a year?

B. What is the expected value of the insurance to its buyer?

C. Was it an advantage of the client? Why?

ENRICHMENT

The Women’s Organization of Barangay Ouano, organize a raffle draw. The

members aim to sell 1,000 raffle tickets at Php 50 per ticket and each ticket has an
equal chance of winning. The prizes are as follows: 1st prize - 24 inches Sony LED TV
worth Php 10,000, 2nd prize – washing machine worth Php 5,000 and 3rd prize – grocery
pack worth Php 2,500. Let X denote the net gain from the purchase of one ticket. Find
the expected value of X, then interpret.

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ANSWER KEY
REVIEW OF THE PREVIOUS LESSON:

Interpretation: The expected value of -P2.4 implies that a person who purchased three
tickets will lose an amount of P2.4 if repeated many times.

ACTIVITY

Suppose Sophie own a coffee shop for a very long time now and her observation is
always accurate about the number of customers per day. The number of customers per
day and their corresponding probability is shown below.

Number of Customers X 50 51 52 53 54
Probability P(X) 0.10 0.20 0.37 0.21 0.12

Sophie is struggling in her business for some reason, and you want to help
Sophie in deciding by getting first the expected value. Help Sophie by writing your
answers in the box.

Sophie, the expected value is 52.1 or 52. This means that on average there are 52
customers in the coffee shop each day.

ANALYSIS

1. There’s no need for Sophie to expand or stock more ingredients because the
expected value is very close to the number she can accommodate.

APPLICATION

a. 1 – 0.003 = 0.997 the probability that the company will NOT pay any amount
to its client within a year
b. The expected value of the insurance to its buyer
X 575,000 - 25,000
P(X) 0.003 0.997

= 575,000(0.003) – 25,000(0.997)
= -23,200
c. This is not an advantage of the client in the long run because the client or the
policyholder will lose P23, 200. But, in the case for a short period especially when the
insured car meets an accident, the advantage is on the client.

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ENRICHMENT:

The expected value is equal to the product of net gain and the probability of
winning (in this case you have 3 chances of winning, you may win the first, second, or
third prize) plus the product of net loss and the probability of losing.

x 9,950 4,950 2,450 -50

𝟏 𝟏 𝟏 𝟗𝟗𝟕
P(x)
𝟏, 𝟎𝟎𝟎 𝟏, 𝟎𝟎𝟎 𝟏, 𝟎𝟎𝟎 𝟏, 𝟎𝟎𝟎

1 1 1 997
𝐸 (𝑋) = ∑ 𝑋 • 𝑃(𝑋) = 9,950( ) + 4,950 ( ) + 2,450 ( ) + −50 (
1000 1000 1000 1000

32,500
= − 1000 ≈ −𝟑𝟐. 𝟓

If someone were to buy 1 ticket repeatedly and although he has a chance to win,
he would lose Php32.50 on average.

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REFERENCES

• Statistics and Probability TG for Senior High School Statistics & Probability
•
• Statistics and Probability, MSA Publishing House, Cainta Philippines.
•
• Statistics and Probability by Rene R. Belecina, et.al, Rex Book Store Inc.
•
• Statistics and Probability. Education Resources Corporation. Quezon City,
Philippines

Statistics and Probability. Vibal Group Inc. Quezon Cty, Philippines.

• Next Century Mathematics Statistics & Probability by Jesus P. Mercado, et.al,

Phoenix Publishing House
•
• SHS Statistics and Probability (PIVOT) Lalunio, E.D.(2020). Solving Problems
Involving Mean and Discrete Random Variable.
•
• Statistics and Probability Vibal by Calaca, Uy, Nobl, Manalo
•
• www.quipperschool.com,

• https://www.onlinemathlearning.com/random-variable.html

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For inquiries or feedback, please write or call:

Department of Education – Schools Division of Surigao del Norte

Peñaranda St., Surigao City
Surigao del Norte, Philippines 8400
Tel. No: (086) 826-8216
Email Address: surigao.delnorte@deped.gov.ph

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