Maths-
General
Easy

Question

If Z = aX + bY and r is the correlation coefficient between X and Y, then sigma subscript z superscript 2 is equal to -

  1. a to the power of 2 end exponent sigma subscript x end subscript superscript 2 end superscript plus b to the power of 2 end exponent sigma subscript y end subscript superscript 2 end superscript plus 2 a b r sigma subscript x end subscript sigma subscript y end subscript    
  2. a to the power of 2 end exponent sigma subscript x end subscript superscript 2 end superscript plus b to the power of 2 end exponent sigma subscript y end subscript superscript 2 end superscript minus 2 a b r sigma subscript x end subscript sigma subscript y end subscript    
  3. 2 a b r sigma subscript x end subscript sigma subscript y end subscript    
  4. None of these    

The correct answer is: 2 a b r sigma subscript x end subscript sigma subscript y end subscript


    To find the variance of z.
    v a r left parenthesis a x plus b y right parenthesis equals a squared v a r left parenthesis x right parenthesis plus 2 a b space c o v a r i a n c e left parenthesis x comma y right parenthesis plus b squared v a r left parenthesis y right parenthesis

r equals fraction numerator c o v a r i a n c e left parenthesis x comma y right parenthesis over denominator square root of v a r left parenthesis x right parenthesis end root square root of v a r left parenthesis y right parenthesis end root end fraction

v a r left parenthesis x right parenthesis equals sigma subscript x squared comma space v a r left parenthesis y right parenthesis equals sigma subscript y squared

c o v a r i a n c e left parenthesis x comma y right parenthesis space equals r sigma subscript x sigma subscript y

v a r left parenthesis z right parenthesis equals sigma subscript z squared equals a squared sigma subscript x squared plus 2 a b r sigma subscript x sigma subscript y plus b squared sigma subscript y squared

    Therefore, var(z) = a to the power of 2 end exponent sigma subscript x end subscript superscript 2 end superscript plus b to the power of 2 end exponent sigma subscript y end subscript superscript 2 end superscript plus 2 a b r sigma subscript x end subscript sigma subscript y end subscript

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