Question
Economics Question on Random variables
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R.
Assertion A : For a random variable X which has mean = 10 and variance = 100. the variance of (5x+10) is 2500.
Reason R : Var(ax+b) = Var(x)
and so the variance of (ax+b)
or Var(5x+10) is 100.
In the light of the above statements, choose the correct answer from the options given below:
A
Both A and R are true and R is the correct explanation of A
B
Both A and R are true but R is NOT the correct explanation of A
C
A is true but R is false
D
A is false but R is true
Answer
A is true but R is false
Explanation
Solution
The correct option is(C): A is true but R is false