Hassett, chapter 6, applications for discrete random variables

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Sections 6.1, 6.2.1 only

6.1 Functions of random variables and their expectations

In general, the expectation value of $f(x)$ is $$ E(f(x)) = \sum f(x) p(x) $$

An example about expected utility of wealth rather than just wealth.

A proof that $V(X)=E(X^2)-(E(X))^2$.

6.2.1 Moments of a random variable

The expectation value of some power of $X$, $E(X^n)$, is called the $n$-th moment of the distribution.