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Stats Problem Help?

If we assume Var(x) is not = 0, show that p(Y, 7Y+3) = 1.  

To solve this question it is my understanding that we use the correlation formula,

 ρ(X, Y ) = Cov(X, Y) / sqrt[Var(X)] sqrt[Var(Y)].

The theory behind it makes sense but I can't figure out how to show the work here.  Thanks for your help!

1 Answer

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  • 1 year ago

    The result is intuitive, since this is basically correlating a variable with itself (which is not affected by the linear combination of 7Y+3).

    In your equation, let the "X" be "Y", and the "Y" be "7Y+3".

    so Var(7Y+3)=7^2 Var(Y)=49Var(Y). And then the denominator of your equation is 

    sqrt[(Var(Y)] sqrt[49Var(Y)] = 7 Var(Y).

    Cov(Y,7Y+3)=E(Y(7Y+3)) - E(Y)E(7Y+3) = 7E(Y^2) +3E(Y) - 7E(Y)^2 - 3E(Y) =

    7Var(Y) (since Var(Y)=E(Y^2) - E(Y)^2).

    And the result follows, since 7Var(Y)/7Var(Y)=1.

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