Statistics and

Probability
Interpreting the Mean and the
Variance of a Discrete Random
Variable
Statistics and Probability
Interpreting the Mean and the Variance of a Discrete Random Variable
First Edition, 2020

Republic Act 8293, section 176 states that: No copyright shall subsist in any work of the Government of the
Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for
exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names, trademarks, etc.) included in this
module are owned by their respective copyright holders. Every effort has been exerted to locate and seek permission to use
these materials from their respective copyright owners. The publisher and authors do not represent nor claim ownership over
them.

Published by the Department of Education

Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writer: Elizabeth D. Lalunio
Editors: Celestina M. Alba and Nestor Sandoval
Reviewers: Irlo L. Dumo, Nenita N. De Leon and Ma. Theresa B. Yanto
Illustrator: Dhojie N. Yanto
Layout Artist: Edna E. Eclavea
Management Team: Wilfredo E. Cabral, Job S. Zape Jr., Elaine T. Balaogan, Fe M. Ong-ongowan, Catherine P. Talavera,
Gerlie M. Ilagan, Buddy Chester M. Repia, Herbert D. Perez, Lorena S. Walangsumbat, Jee-Ann O. Briones
Celestina M. Alba, Asuncion C. Ilao

Department of Education – Region IV-A CALABARZON

Office Address: Gate 2 Karangalan Village, Barangay San Isidro

Cainta, Rizal 1800
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: region4a@deped.gov.ph

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Week

3
What I Need to Know
This module was designed and written with you in mind. It is here to help you
understand why we need to find the mean and variance of a discrete random variable
and how to interpret it. The language used recognizes the diverse vocabulary level of
students. The lessons are arranged to follow the standard sequence of the course.
But the order in which you read them can be changed to correspond with the
textbook you are now using.

This module has only one lesson which focuses on interpreting the mean and
variance of a discrete random variable. Your knowledge and skill on how to use the
formula for the mean, variance, and standard deviation that you learned from
previous modules are pre-requisite skills. Accurate computations will yield accurate
interpretations. In case that there will be mistakes in the calculations of mean,
variance, and standard deviation, interpretation of the data will be affected. And if
we interpret the result based on the miscalculations, our tendency to make a not so
wise decision is higher. So, to be successful in this module, always review your
computations before you make interpretations. Expect also that some of the practice
exercises and problems included here need your patience and determination because
it requires long computations. It will teach you the virtues of being patient and
striving for excellence. Bear in mind that you need to review first your solutions to
arrive with accurate interpretations. So, are you now ready? Let us start your journey
today.

After going through this module, you are expected to:

1. interpret the mean and variance of a discrete random variable; and
2. recall and apply the formulas for the mean, variance, and standard deviation
of a discrete random variable.

What I Know
Before studying this module, take this test to determine what you already know
about the topic covered.
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. What do you call a random variable with possible values that form a finite or
countable set?
A. continuous C. finite
B. discrete D. infinite
2. What term is used to describe the average value of a discrete random variable
over numerous trials of an experiment?
A. mean C. standard deviation
B. probability D. variance
3. Which of the following represents the amount of spread, dispersion, or variability
of the items in a distribution?
A. mean or expected value
B. median and mode
C. outcomes and probability distribution
D. variance and standard deviation
4. Which of the following is also equal to the square root of the variance?
A. mean C. probability

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 B. median D. standard deviation
5. How would you interpret a very small variance or standard deviation but not equal
to zero?
A. The values of the random variables are farther from the mean.
B. The values of the random variables are nearer to the mean.
C. The values of the random variables are equal to the mean.
D. The values of the random variables have no relationship with the mean.
6. Which of the following shows most likely the largest possible variance or
variability?
A. number of girls in a randomly selected three-child family
B. number of newborn babies per minute.
C. number of Oreo cookies inside a 133 grams pack from different
branch of 711 stores
D. number of patients who are positive with COVID-19 in different
hospitals
7. Which of the following data shows most likely the smallest possible variance or
variability?
A. number of books in different branch of National Bookstore
B. number of books inside a pack bag of grade 11 students
C. number of books inside the library of different universities
D. number of books inside the library of different households
8. What formula is described by 𝜎 2 = ∑[𝑥 2 𝑃(𝑥)] − 𝑢2 ?
A. the mean of a discrete random variable
B. the variance of a discrete random variable
C. the standard deviation of a discrete random variable
D. the expected value of a discrete random variable
For numbers 9-12, refer to the probability distribution of rolling a single
unfair die.
𝑥 1 2 3 4 5 6
𝑃(𝑥) 0.1 0.1 0.1 0.5 0.1 0.1
9. What is the mean of the probability distribution?
A. 2.5 B. 3.7 C. 4.1 D. 5.7
10. What is the variance of the probability distribution?
A. 1.81 B. 2.34 C. 3.70 D. 4.26
11. What is the standard deviation of the probability distribution?
A. 1.07 B. 1.35 C. 1.92 D. 2.06
12. How would you interpret the mean value that you get in item number 9?
A. The mean value is the difference between each probable value of the
outcome when you roll the unfair die in numerous trials.
B. The mean value is the higher probable value of the outcome when you roll
the unfair die in numerous trials.
C. The mean value is the lowest probable value of the outcome when you
roll the unfair die in numerous trials.
D. The mean value is the closest value to the most probable value of the
outcome when you roll the unfair die in numerous trials.
13. Which of the following is NOT a property of the variance?
A. The variance is not equal to the standard deviation.
B. A small variance means that the distribution of the random variable is
narrowly concentrated around the mean.
C. A large variance means that the distribution is spread out, with some chance
of observing values at some distance from the mean.
D. The value of the variance is less than zero.

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For numbers 14-15. The mean of the probability distribution below is equal to 18.2
with a variance of 5.86 and a standard deviation of 2.42.

Number of cellphones sold per

day in a retail store (𝑥) 15 18 19 20 22

Probability (𝑃(𝑥) 0.30 0.20 0.20 0.15 0.15

14. How would you interpret the mean value of 18.2?
A. The least number of cellphones that will be sold in a day is 18 pieces.
B. The highest number of cellphones that will be sold in a day is 18 pieces.
C. The average number of cellphones that will be sold in a day is 18 pieces.
D. No interpretation can be made about the mean value of 18.2.

15. How would you interpret the values of variance and standard deviation?

A. It gives the difference between the highest number of cellphones and the least
number of cellphones that can be sold.
B. It is the average number of cellphones that can be sold in a day.
C. It describes how the data or the number of cellphones sold in a day varies.
D. No interpretation can be made about the variance and standard deviation.
Lesson 1 Interpreting the Mean and Variance
of a Probability Distributions
Decision-making is an important skill that each individual should acquire. It is a
must that you should be wise when making decisions. In real life, we always
encounter situations where we have to choose the best option to arrive with the right
decision. Thinking critically and logically will help you to decide on things wisely.
Considering that you might become a CEO of a company, a professional, a father or
a mother, surely this lesson will help you to decide on future financial situations.
Interpreting the mean and variance of probability distributions will give you the idea
on how to weigh things, for you to choose the right option.

What’s In
What’s the formula?
The following formulas were introduced to you in the previous lessons, write the
correct formula in each box to complete this task.
Formula 1: 𝜇𝑥 = ∑[𝑥𝑖 ∙ 𝑃(𝑥)]
Formula 2: 𝜎 2 = ∑[𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2
Formula 3: 𝜎 2 = ∑(𝑥 − 𝑢)2 𝑃(𝑥)

Formula 4: 𝜎 = √[𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2

Situation 1: I am thinking of finding the average number of heads that would appear
if I will toss two coins together twice. Which formula should I use?

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Situation 2: I went to the grocery store and I noticed that there are five different kinds
of brown sugar at different prices, each brand has different probabilities that they
will be sold. What formula should I use if I want to determine how the prices vary
from the average price of the product that would be sold to the customers repeatedly?

Solution:
Situation 1: The correct formula is 𝜇𝑥 = ∑[𝑥𝑖 ∙ 𝑃(𝑥)], because it is the formula to be
used if you want to find the mean of a discrete random variable.

Situation 2: The correct formula is 𝜎 = √[𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2 , because it is the formula to

be used if you want to find the standard deviation of a discrete random variable.
Even though formulas 2 and 3 (formulas to find the variance) measures also the
variability of the values assumed by the random variable X (prices of brown sugar) in
repeated trials (sold to the customers repeatedly). The units of standard deviation
match those with X because standard deviation is a square root of the variance.

What’s New
An Unfair Die
Suppose an unfair die is rolled and let X be the random variable representing the
number of dots that would appear with a probability distribution below.

Outcome 1 2 3 4 5 6
(𝑥)
Probability 0.1 0.1 0.1 0.5 0.1 0.1
P(𝑥)
Questions:
1. What will be the average number of dots that would appear?
2. How does the assumed value of the outcome vary from the average number
of dots that would appear?
3. Will you join in a game of chance using an unfair die?
What Is It
Recall that in your previous lesson, you learn how to calculate the mean, variance,
and standard deviation of a discrete random variable. So, with those skills, you will
be able to answer the questions in the previous activity.
First, let us find the mean of the probability distribution using the formula.

𝜇𝑥 = ∑[𝑥𝑖 ∙ 𝑃(𝑥)]

𝜇𝑥 = 1(0.1) + 2(0.1) + 3(0.1) + 4(0.5) + 5(0.1) + 6(0.1)

𝜇𝑥 = 3.7
Therefore, the mean of the probability distribution is 3.7. Since the mean is equal to
3.7, we can say that the average number of dots that would appear is a number near

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to 3.7 which is 4. If we will repeat the experiment over and over, there is a higher
possibility the 4 dots will always appear since the average number of dots that would
appear is 4.
To determine the variability of the assumed values from the mean, use the formulas
for finding variance and standard deviation. But first, construct a table like the one
below:

𝑥 𝑃(𝑥) 𝑥 ∙ 𝑃(𝑥) 𝑥2 𝑥 2 ∙ 𝑃(𝑥)

1 0.1 0.1 1 0.1
2 0.1 0.2 2 0.4
3 0.1 0.3 9 0.9
4 0.5 2 16 8
5 0.1 0.5 25 2.5
6 0.1 0.6 36 2.6

∑[𝑥 2 ∙ 𝑃(𝑥)] = 15.5

Then use the formulas, thus

𝜎 2 = ∑[𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2 = 15.5 − (3.7)2 = 1.81

𝜎 = √𝜎 2 = √1.81 = 1.35
Therefore, the variance of the random variable X (the number of dots appeared) is
equal to 1.81 while the standard deviation is equal to 1.35. Take note that, small
variance or standard deviation means that the assumed values or data points tend
to be very close to the mean, while higher variance or standard deviation means that
the assumed values or data points are spread out from the mean. Specifically, the
variance and standard deviation measures or describes how far a set of data
(assumed values of random variables) is spread out. Since the value of the standard
deviation is 1.35, we can say that the assumed values of each outcome are somewhat
close to the mean for about 1.35 units from the mean.
Knowing this information, you may now decide whether you will join a game using
an unfair die. Make sure you will think more critically and logically before you make
a decision and remember being fair and just is a virtue.
Bear in mind that the mean of a discrete random variable is just the average value
of a random variable over repeated trials of experiment and in the next lesson it will
be discussed further and its application to the real-life situation.
To understand more the concept of the variance and standard deviation, the following
are examples that will give you a deeper idea about the concept of variance and
standard deviation.
The first data in the following examples is somewhat expected to have a higher
variance and standard deviation or variability compare to the other data.
Example 1
The population size of 100 different countries around the world compare to the
population of 10 countries belong to the first world countries

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Due to a large number of samples (100 different countries) and other factors such as
land area, economic status, etc., you may say that most likely you will get a higher
variance and standard deviation compared to the population of 10 countries belong
to the first world countries
Example 2
The number of students in different universities compares to the number of students
in a class in a particular school.
Considering different universities with different size and course offerings, you may
say that the difference between their enrolments will be much higher than the
difference of each class size in a particular school
Example 3
The number of people who love to play basketball in different barangays to the
number of basketball players from different teams who play in the first-quarter game.
Basketball is a famous game and almost every guy loves to play this game. Imagine
that you will gather the number of people who love to play from different barangays,
it is expected that you will gather different results compared to the number of
basketball players from different teams who play in the first-quarter game. Almost
everybody is aware that there are only five players from each team to play a game,
therefore if you will compute the variance of the data from different teams you will
get a value of zero. The mean will be equal to 5 because each team who play the game
will should have 5 players only, at the same time if you will compute the variance of
distribution with equal inputs you will get a value of zero.
The mean and variance of a discrete random variable are easy to understand if you
know the concepts behind these two measurements. As you go on with the different
modules in Statistics and Probability, mean and variance will always be included in
the discussion. The mean, variance, and standard deviation are important in
statistics because they serve as the basis for other types of statistical calculations or
statistical tests.

What’s More
In the following activities, read each situation carefully to solve each problem.
Write your answer on a separate sheet of paper.
Practice Activity 1
The number of cellular phones sold per day at the E-Cell Retail Store with the
corresponding probabilities is shown in the table below. Compute the mean,
variance, and standard deviation and interpret the result.
Number of cellphones sold
per day in a retail store (𝑥) 15 18 19 20 22

Probability (𝑃(𝑥) 0.30 0.20 0.20 0.15 0.15

Solution:
Complete the statement:

𝜇𝑥 = ∑[𝑥𝑖 ∙ 𝑃(𝑥)] = 15(0,30) + 18(0.20) + 19(0.20) + 20(0.15) + 22(0.15) = _______

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 The mean is equal to ____________ therefore, it means that the average number
of cellular phones of sold per day is ________________.
To find the variance complete the table below:

𝑥 𝑃(𝑥) 𝑥 ∙ 𝑃(𝑥) 𝑥2 𝑥 2 ∙ 𝑃(𝑥)

15 0.30 4.5
18 0.20 3.6
19 0.20 3.8
20 0.15 3
22 0.15 3.3

∑[𝑥 2 ∙ 𝑃(𝑥)] = ___________

𝜎 2 = ∑[𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2 = _______ − ________ = ___________

𝜎 = √𝜎 2 = __________ = ___________
Therefore, the variance of a probability distribution is equal to ___________, while
the standard deviation is equal to _________________.
Independent Activity 1
Beth’s Bread and Pastry Shop determines the number of cupcakes sold per day with
its corresponding probabilities. Find the mean, variance, and standard deviation of
the probability distribution below. If Beth, the owner of the shop is claiming that the
average number of cupcakes sold in a day is 150 pieces, do you think it is a believable
claim?
Number of cupcakes
sold per day (𝑥) 90 120 135 150 160 175

Probability 𝑃(𝑥) 0.15 0.10 0.20 0.20 0.20 0.15

Practice Activity 2
Analyze the following pairs of data and identify which of the following will most likely
yield to a higher variance and higher standard deviation. Put a check mark on the
appropriate box.

1. Number of students from different grade levels.

Number of boys in a family with three children.

2. Number of fish inside the aquarium from different households.

Number of fish inside a can from the different local brands of sardines.

3. Number of COVID-19 patients from different hospitals.

Number of family members with fever in a barangay.

4. Number of M & M’s peanuts inside a 1.69 0z bag from different retail
stores.

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 Number of kernels in corn of different sizes.

5. Number of players in a group playing the game “the boat is sinking.”

Number of passengers in different luxury cruise ships.

Independent Activity 2
Give examples of at least two pairs of data that will most likely yield different variance
and standard deviation. Identify the one with a higher possible value of variance and
explain why.
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
______________________________________________________

What I Have Learned

Complete the following statements by writing the correct word or words.
1. The mean of a discrete random variable is interpreted as the ______________ value
of a random variable over repeated trials of an experiment.
2. The variance and standard deviation of a discrete random variable measured or
described the ____________________ of the assumed values of the random variable
to the mean.
3. A small variance or standard deviation means that the assumed values or data
points tend to be ___________________to the mean.
4. A higher variance or standard deviation means that the assumed values or data
points are __________________ from the mean
What I Can do
Oh, what a game!
Things to do:
Device a game of chance using a fair die with corresponding winnings and losses.
For example, in rolling a die you may assign even outcomes as winning outcomes
and the odd outcomes as the losses or think of your own plan. Let X the amount to
be won by a player or the amount he will lose when he plays your game. Compute
for the mean or the average amount a player may win or lose, the variance and the
standard deviation, and interpret the results. Don’t forget that each face of a die has
1
a probability of . Be prepared to describe your game and demonstrate it in our
6
class next meeting or you may prepare a video of your demonstration to be
submitted online.
Rubrics for the task:

4 3 2 1
Categories Excellent Satisfactory Developing Beginning

Organization of The The The The

Game Plan mechanics of mechanics of mechanics of mechanics of
the game is the game is the game is the game is
clear and clear and somewhat not not clear.

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 enjoyable to enjoyable to clear and
play with a play with no shows
twist. It also twist. It also concepts of
shows shows mean and
concepts of concepts of variance
mean and mean and
variance. variance.

Accuracy of the The There is one There is one There are

Solutions computations mistake in the mistake in more
are accurate computations the mistakes with
with a table of with a table of computations no table of
probability probability with no table probability
distributions. distributions. of probability distributions.
distributions.

Demonstration The The The The

demonstration demonstration demonstratio demonstrator
accurately shows some n did not is not
shows how to missing work well prepared to
play the game. details on how because the demonstrate
to play the audience how to play
game. cannot follow the game.
the rules of
the game.

Assessment
Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Which of the following is an example of a discrete random variable?
A. weight of newborn babies
B. body temperature of COVID-19 patients
C. number of heads that will come out if you toss a coin twice
D. height of basketball players
2. Which of the following best describe the mean of a discrete random variable?
A. It is the lowest assumed value of a discrete random variable.
B. It is the highest assumed value of a discrete random variable.
C. It is the average value of a discrete random variable over numerous trials of
an experiment.
D. It is the amount of spread, dispersion, or variability of the assumed value of a
discrete random variable.
3. Which of the following best describe the variance and standard deviation of a
probability?
A. It is the lowest assumed value of a discrete random variable.
B. It is the highest assumed value of a discrete random variable.
C. It is the average value of a discrete random variable over numerous trials of
an experiment.
D. It is the amount of spread, dispersion, or variability of the assumed value of a
discrete random variable.

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 4. Which of the following best describe the standard deviation of a probability
distribution?
A. It is twice the variance.
B. It is the product of the mean and the variance.
C. It is the ratio of the mean and the variance.
D. It is the square root of the variance.
5. How would you interpret a very small variance or standard deviation?
A. The values of the random variables are equal to the mean.
B. The values of the random variables are closer to the mean.
C. The values of the random variables are farther from the mean.
D. The values of the random variables have no relationship with the mean.
6. Which of the following data show most likely the largest possible variance
or variability?
A. number of pieces of French fries in a regular pack from different orders of
customers at McDonalds
B. number of boys in families of three-children
C. number of customers per hour who went shopping at SM Super Malls
D. number of heads that will appear if two coins are tossed together
repeatedly
7. Which of the following data show most likely the smallest possible
variance or variability?
A. the number of passengers in a tricycle per destinations
B. the number of applicants in the different job opening
C. the number of families who own a private vehicle in different cities in NCR
D. the number of adults who use public restrooms in Metro Manila
8. What formula is described by 𝜎 = √∑[𝑥 2 𝑃(𝑥)] − 𝑢2 ?
A. the mean of a discrete random variable
B. the variance of a discrete random variable
C. the standard deviation of a discrete random variable
D. the expected value of a discrete random variable
For numbers 9 -12, refer to the probability distribution of the number of books
borrowed from a school library in a day and its corresponding probabilities.
𝑥 20 25 30 35 40 45
𝑃(𝑥) 0.1 0.1 0.4 0.2 0.1 0.1
9. What is the mean of the probability distribution?
A. 25 B. 29 C. 30 D. 32
10. How would you interpret the mean value that you get from item number 8?
A. It is the least number of books borrowed from the school library in a day.
B. It is the largest number of books borrowed from the school library in a day.
C. It is the average number of books borrowed from the school library in a day.
D. It is the difference between the largest and the least number of books borrowed
from the school library in a day.
11. What is the variance of the probability distribution?
A. 38 B. 40 C. 43 D. 46
12. What is the standard deviation of the probability distribution?
A. 6.16 B. 6.32 C. 6.56 D. 6.78
13. Which of the following is NOT a property of the variance?
A. A small variance means that the distribution of the random variable is
narrowly concentrated around the mean.
B. A large variance means that the distribution is spread out, with some chance
of observing values at some distance from the mean.
C. The variance is a value that is always positive.
D. The variance is a value that is always negative.

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 For numbers 14-15. The mean of the probability distribution below is equal to
37.05 with a variance of 36.75 and a standard deviation of 6.06.

Number of ice
candy sold per
30 32 36 40 42 45
day in a retail
store (𝑥)
Probability (𝑃(𝑥) 0.30 0.10 0.15 0.10 0.10 0.25
14. How would you interpret the mean value of 37.05?
A. The least number of ice candy that will be sold in a day is 37 pieces.
B. The highest number of ice candy that will be sold in a day is 37 pieces.
C. The average number of ice candy that will be sold in a day is 37 pieces.
D. No interpretation can be made about the mean value of 37.05.
15. If you are the owner of the retail store, how many ice candies will you
prepare to ensure that you can supply the demands of your customers
every day?
A. 10 pieces and below C. 21-30 pieces
B. 11-20 pieces D. 30 pieces and above
Additional Activities
This activity is design for you to gain a deeper understanding of the mean,
variance, and standard deviation. It will not just help you to practice your skill but
it will give you a chance to compare the results with theoretical explanations.
Try it and enjoy it!
Things to do:
Roll a die 50 times. Record the result and construct a probability distribution to
find the mean, variance, and standard deviation. Compare the results with
theoretical results:
Take Note of This:
The probability distribution of rolling a die is given below, this will serve as your
theoretical result.
Outcome (𝑥) 1 2 3 4 5 6
Probability of the 1 1 1 1 1 1
Outcome
𝑃(𝑥) 6 6 6 6 6 6

103
 Statistics and
Probability
Solving Problems Involving Mean
and Variance of Probability
Distributions
Statistics and Probability
Solving Problems Involving Mean and Variance of Probability Distributions
First Edition, 2020

Republic Act 8293, section 176 states that: No copyright shall subsist in any work of the Government of the
Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for
exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names, trademarks, etc.) included in this
module are owned by their respective copyright holders. Every effort has been exerted to locate and seek permission to use
these materials from their respective copyright owners. The publisher and authors do not represent nor claim ownership over
them.

Published by the Department of Education

Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writer: Elizabeth D. Lalunio
Editors: Celestina M. Alba and Nestor N. Sandoval
Reviewers: Irlo L. Dumo, Nenita N. De Leon and Ma. Theresa B. Yanto
Illustrator: Kelvin A. Ramintas and Dhojie N. Yanto
Layout Artist: Edna E. Eclavea
Management Team: Wilfredo E. Cabral, Job S. Zape Jr., Elaine T. Balaogan, Fe M. Ong-ongowan, Catherine P. Talavera,
Gerlie M. Ilagan, Buddy Chester M. Repia, Herbert D. Perez, Lorena S. Walangsumbat, Jee-Ann O. Briones
Celestina M. Alba, Asuncion C. Ilao

Department of Education – Region IV-A CALABARZON

Office Address: Gate 2 Karangalan Village, Barangay San Isidro

Cainta, Rizal 1800
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: region4a@deped.gov.ph

104
Week

3
What I Need to Know
This module was intended and written focusing on learners like you. It is here to help
you apply the mean or expected value of the discrete random variable or the average
value when the experiment is repeated many times to real-life situations such as
taking a chance in a raffle, making a bet in games of chance and considering an
insurance policy. It is hoped that this module will help you to make decisions
whether or not to participate in games of chances like lotteries, raffle draws, and
gambling.
In this module, you will learn how to compute the probability or the chance of
winning and losing. Your knowledge and skill on how to use the formula for the mean
and variance that you learned from previous modules are important, for you to solve
real-life problems involving the mean and variance of probability distributions. Good
luck and happy learning.

After going through this module, you are expected to:

1. calculate the mean and the variance of a discrete random variable;
2. solve real-life problems involving mean and variance of probability
distributions; and
3. interpret the expected value of a discrete random variable.

What I Know
Before studying this module, take this test to determine what you already know
about the topic covered.
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.

1. Which of the following represents the mean value of a discrete random variable?
A. Expected value C. Standard deviation
B. Median D. Variance
For numbers 2-3, refer to the table below:
𝑥 2 4 6 8
𝑃(𝑥) 0.12 0.29 0.24 0.35
2. Which of the following is the correct formula to find the expected value of the
probability distribution?
A. 𝐸(𝑥) = ∑[𝑥 ∙ 𝑃(𝑥)] C. 𝐸(𝑥) = ∑[𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2
B. 𝐸(𝑥) = ∑[𝑥 2 ∙ 𝑃(𝑥)] D. 𝐸(𝑥) = √∑[𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2
3. What is the mean or the expected value of the given probability distribution?
A. 4.85 B. 5.64 C. 6.32 D. 7.12
For numbers 4-6, refer to the following:
You buy one ₱500.00 raffle ticket for a prize of new Toyota Wigo car valued at ₱675,
000.00. Two thousand tickets are sold.
4. What is the probability that you will win the prize?
1 1 1
A. 1 B. C. D.
500 2000 675000
5. If X denotes the net gain from the purchase of a randomly selected ticket.
Which of the following tables of values shows the probability distribution
of X?
x 675,000 -500

105
 A. P(x) 1 1999 C. x 674,500 -500
2000 2000 P(x) 1 1999
2000 2000
x 675,000 500 x 674,500 500
B. V P(x) 1 1999 D. P(x) 1 1999
2000 2000 2000 2000

6. What is the mean or the expected value for those who will buy the tickets?
A. -162.50 B. -162.25 C. 162.25 D. 162.50
For numbers 7-8, refer to the following:
One thousand tickets are sold for ₱10.00 each. One ticket will win ₱2,000.00, two
tickets will win ₱1,000.00 each and four tickets will win ₱500.00 each.
7. What is the probability of winning any amount in the purchase of two tickets?
1 2 5 7
A. 𝐵. C. D.
1000 1000 1000 1000

8. What is the probability of losing in the purchase of two tickets?

2 500 998 999
A. 1000 𝐵.
1000
C.
1000
D.
1000
For numbers 9-11, refer to the following:
A roulette wheel in a fiesta carnival has the numbers 1 through 50. If you bet ₱5.00,
you will have a chance to win a kitchen utensil worth ₱200.00.
9. If X denotes the net gain from taking a chance to bet on a randomly selected
number. Which of the following tables of values shows the probability distribution
of X?
A. x 195 -5 C.
x 50 -5
P(x) 1 49 P(x) 1 199
50 50 200 200
B. x 5 -5 D. x 200 5
P(x) 1 4 P(x) 1 5
5 5 200 200
10. What is the mean or the expected value for those who take a bet?
A. – 1.8 B. -1 C. -0.95 D. -0.5
11. How much the organizer will earn if 100 games will be played such that each
number has a bet of ₱5.00?
A. ₱2,000.00 B. ₱3,000.00 C. ₱4,000.00 D. ₱5,000.00
For items 12-13, refer to the following:
Good Hands is a car insurance company who offers to pay ₱600,000.00 if a car is
destroyed beyond repair due to an accident. This insurance policy cost ₱25,000.00 per
year and the probability that the company will need to pay the amount of insurance is
0.003.
12. What is the probability that the company will NOT pay any amount to its client
within a year?
A. 0.003 B. 0.250 C. 0.500 D. 0.997
13. What is the expected value of the insurance to its buyer?
A. Each policyholder expects to lose ₱20,000.00 every year.
B. Each policyholder expects to lose ₱22,500.00 every year.
C. Each policyholder expects to lose ₱23,200.00 every year.
D. Each policyholder expects to lose ₱25,000.00 every year

106
 For items 14 to 15, refer to the following:
A life insurance company will sell a ₱500,000.00 five-year term life insurance policy
exclusive for police enforcers for a premium of ₱1,000.00. The chance that a police
enforcer will survive in 5 years is 99.95%.
14. What is the probability that a police enforcer will NOT survive in five-
years?
A. 0.05
B. 0.005
C. 0.005
D. 0.0005
15. What is the expected value to the company of a single policy?
A. ₱550.00
B. ₱650.00
C. ₱750.00
D. ₱850.00
Lesson 1 Solving Problems Involving Mean
and Variance of Probability
Distributions
Are you interested in buying lotto tickets? How about making a bet in a
roulette wheel or taking a chance in raffle tickets? Do you want to know how much
gain will you have if you will win in games of chance or how much money will be
wasted if you lost on a bet? Are you planning to invest money in a life insurance
company? If you had thought of the following questions this lesson is for you.
What’s In
For you to begin let us recall first the previous lessons which are very
important for you to succeed. From your last module, you learned that the expected
value or mean value of a discrete random variable, denoted by x, is computed by
first multiplying each possible x value by the probability of observing that value and
then adding the resulting quantities.
Symbolically,
𝐄(𝐱) = 𝐮𝐱 = ∑[𝐱 𝐢 ∙ 𝐏(𝐱 𝐢 )].
where:
𝑥𝑖 is the value of the random variable for the outcome 𝑖;
𝑃(𝑥𝑖 ) is the probability that a random variable will have an outcome 𝑖;
𝑢𝑥 is the mean of a random variable 𝑥; and
𝐸(𝑥) is the expected value of random variable 𝑥.

Also, you already learned the equation for computing the variance of a discrete
random variable. To find the variance, remember the formula:
𝜎 2 = ∑(𝑥 − 𝜇)2 ∙ 𝑃(𝑥)

which can be simplified as

𝜎 2 = [∑ 𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2
where:
𝑥 2 is the square value of a discrete random variable 𝑥;
𝑃(𝑥) is the probability of an outcome of a discrete random variable;
𝑢2 is the square of the mean of a discrete random variable; and

107
 𝜎 2 is the variance of a discrete random variable

Moreover, the standard deviation 𝝈, of a discrete random variable X is the square

root of its variance, hence the formula is:

𝝈 = √∑(𝒙 − 𝝁)𝟐 ∙ 𝑷(𝒙) or 𝝈 = √[∑ 𝒙𝟐 ∙ 𝑷(𝒙)] − 𝒖𝟐

The variance and standard deviation of a discrete random variable X may be

interpreted as measures of variability of the values assumed by the random variable
in repeated trials of the experiment.

Before you proceed to the next lesson, study the example below, and reflect whether
you are now ready to proceed to the new lesson.
Example
The table below shows the probability distribution of the number of girls in a family
of three children in Barangay Maligaya. Calculate the mean and variance of the
random variable with the given probability distribution.
Outcome or GBB,BGB, GGB, GBG,
BBB GGG
Sample Point BBG BGG
𝑥 0 1 2 3
𝑃(𝑥) 1/8 3/8 3/8 1/8
Solution:
Finding the mean of the discrete random variable:
𝐸(𝑥) = 𝑢𝑥 = ∑[𝑥𝑖 ∙ 𝑃(𝑥𝑖 )]
1 3 3 1
𝐸(𝑥) = 𝑢𝑥 = [(0 ∙ ) + (1 ∙ ) + (2 ∙ ) + (3 ∙ )]
8 8 8 8
3 6 3
𝐸(𝑥) = 𝑢𝑥 = [(0) + ( ) + ( ) + ( )]
8 8 8
12 3
𝐸(𝑥) = 𝑢𝑥 = = = 1.5
8 2
Therefore, the mean or the expected value of the discrete random variable is
1.5.
To find the variance and standard deviation of the discrete random variable you need
to prepare a table like the one below.

𝑥 𝑃(𝑥) 𝑥2 𝑥 2 ∙ 𝑃(𝑥)
0 1⁄ 0 0
8
1 3⁄8 1 3⁄8
2 3⁄ 4 12⁄ 𝑜𝑟 3⁄
8 8 2
3 1⁄ 9 9⁄
8 8
From the table, the variance and standard deviation can be computed using:
3 12 9 24
∑ 𝑥 2 ∙ 𝑃(𝑥) = 0 + + + = =3
8 8 8 8
𝜎 2 = [∑ 𝑥 2 ∙ 𝑃(𝑥)] − 𝑢2 = 3 − (1.5)2 = 3 − 2.25 = 0.75
𝜎 = √𝜎 2 = √0.75 = 0.87
Therefore, the variance of the discrete random variable is 0.75, while the
standard deviation is 0.87.

108
 What’s New
GAME OF CHANCE

Read the conversation below and answer the questions that follow.

Oh no! I do understand but if

you want to take a chance I
Our television set is no have here 5 raffle tickets out of
Hey Romulo I longer functional and I 1000 released tickets which
Ok, so what’s
have a problem. your problem need to buy a new one. cost ₱100.00 each. If you will
my friend? But the problem is I don’t be lucky enough, you’ll get a
have enough budget for 32-inch LED Television worth
that. ₱15,000.00.

That’s a good deal and the prize

is so exciting! But I need to check
my budget before buying a ticket.
Thanks for informing me. I’ll just It will be 10 days from now.
call you when I am ready to buy. You still have time to decide,
By the way, when is the raffle just call me if you already Thank you You’re welcome Cardo!
date? have your decision. Romulo!

109
Questions:

1. If you are Cardo, would you buy a raffle ticket? Why?

_______________________________________________________________
2. If Cardo decided to buy five tickets, what is the probability that he would
win the prize if 1000 tickets were sold? ____________________________
What is the probability that Cardo will lose the bet? __________________
3. How much money will Cardo gain if he wins the prize?________________
4. How much money will be wasted if he will not win the prize and he buy
one ticket?___________________________________________________________
5. What if 1000 tickets were purchased by different individuals, what is the
expected value of buying one ticket?___________________________________
6. How would you describe Romulo as a friend?___________________________
What Is It
To answer question 1 in the previous activity, you have to understand first the
consequences of buying a ticket, will it give you advantages and disadvantages? Can
you afford to spend extra money to buy a ticket?
Look at this way, if you will buy a ticket you will have a chance to win the
prize worth ₱15,000.00 if you are lucky enough it is good for you. But on the other
hand, what if you are not lucky, then you will lose ₱500.00 for buying the five tickets.
Considering this amount (₱500.00), you are aware that you can buy more essential
needs like foods, school and medical supplies, and other miscellaneous needs with
this amount rather than using it to buy tickets. However, if you allocated extra money
for other unexpected expenses, buying a ticket is not bad at all. The point of making
the right decision is not difficult if you know how to consider what is more important.
If you are Cardo, you need to understand the given details on the situation for
you to make the right decision. If you will win the prize, your net gain is ₱15,000.00
less ₱500.00 (amount spend for buying 5 tickets) or ₱14,500.00. The probability that
5
you will win the prize is five out of one thousand tickets or . But if you decide to
1000
buy one ticket only, then your net gain is ₱15,000.00 less ₱100.00 (amount spend for
buying 1 ticket) or ₱14,900.00 and the probability that you will win the prize is one
1
out of one thousand tickets or . The more tickets you buy, the more chances of
1000
winning. However, your chance of losing is higher than your chance of winning
because it is equal to 1 less than the probability of winning if you buy five tickets the
995
probability that you will not win the prize is or 0.995 while if you buy one ticket
1000
999
only, the probability is or 0.999.
1000

What if 1000 tickets were purchased by different individuals, what is the

expected value of buying one ticket? To answer this question, you need to apply the
formula for the mean or expected value of the discrete probability distributions which
is equal to 𝐄(𝐱) = 𝐮𝐱 = ∑[𝐱 𝐢 ∙ 𝐏(𝐱 𝐢 )]. The expected value is also defined as the average
value of a random variable over numerous trials of an experiment. The table below
is the probability distribution of the given situation.

𝑥 14, 900 -100

𝑃(𝑥) 1 999
𝑜𝑟 0.001 𝑜𝑟 0.999
1000 1000

110
Using the formula of expected value,
𝐄(𝐱) = (𝟏𝟒, 𝟗𝟎𝟎)(𝟎. 𝟎𝟎𝟏) + (−𝟏𝟎𝟎)(𝟎. 𝟗𝟗𝟗)
𝐄(𝐱) = −𝟖𝟓
The negative value means that one loses money on the average. In particular,
someone who buy tickets, and although has a chance to win losses ₱85.00 per ticket
purchased.
Having this knowledge, you can now make a wise decision, but remember
important things should be prioritized, if you can afford to buy tickets without
sacrificing your essential needs it is okay to take a chance sometimes. You should
also consider saving money for future use, because not every day you have enough
funds, having extra money would be a great help in times of need.
Meanwhile, having a friend like Romulo who are ready to help you or to advise
you in time of need is a precious one. He is a kind of friend who does not insist on
what he wants but let his friend decide on his own after giving a piece of advice. You
are blessed if you will find a true friend that you can rely on. Having a true friend is
wealth.
What’s More
In the following activities, read each situation carefully to solve each problem. Write
your answer on a separate sheet of paper.
Practice Activity 1

Raffle Tickets Problem

Senior citizens of a particular barangay organize a Christmas raffle bonanza.

One thousand raffle tickets are sold for ₱50.00 each. Each one has an equal chance
of winning. The first prize is a 32-inch LED TV worth ₱10,000.00, the second prize
is an electric oven worth ₱5,000.00 and the third prize is a grocery pack worth
₱2,500.00. Let X denote the net gain from the purchase of one ticket.

a. Complete the table below showing the probability distribution of X.

𝑥 9,950 4,950 2,450 -50

𝑃(𝑥)

b. Find the probability of winning any amount in the purchase of one ticket.
Let 𝑃(𝑊) the probability of winning any amount

𝑃(𝑊) = _____ + _____ + _____

𝑃(𝑊) = _____
c. Find the expected value of X, then interpret.

The expected value is equal to the product of net gain and the probability
of winning (in this case you have three chances of winning, you may win

111
 the first, second, or third prize) plus the product of net loss and the
probability of losing.

𝐄(𝐱) = _______________

Interpretation:__________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________

Independent Assessment 1

Raffle for a Cause

A raffle is held to raise funds for a charity event. A raffle ticket costs ₱150.00
and there are two thousand tickets to be sold. Only one ticket holder will win a prize
of ₱150, 000. 00. Construct the probability distribution of the discrete random
variable, compute for the expected value, and interpret the result.

Practice Activity 2

Game of Chance Problem (A Roulette Wheel)

A roulette wheel in a fiesta carnival has the numbers 1 through 30. If you bet
₱5.00 you will have a chance to win a prepaid load worth ₱100.00. Let X denote the
net gain for a bet.

a. Complete the table below showing the probability distribution of X.

𝑥 95 -5
𝑃(𝑥)

b. Find the expectation if you play a bet and interpret the result.

𝐄(𝐱) = _______________

Interpretation:__________________________________________________________
________________________________________________________________________
______________________________________________________

c. How much the organizer will earn if 100 games will be played such that each
number has a bet of ₱5.00? ____________________________
(Hint: Compute for the net gain of the organizer per game and multiply it
by 100)
Independent Assessment 2

Colored Wheel
A roulette wheel is divided into eight colors blue, red, yellow, green, orange,
violet, black, and white. Each time roulette is spun, you can have a bet of ₱10.00. If
the outcome is either black, blue, or violet you will lose the bet. But if the outcome
is red or yellow, your money will be doubled (you will win additional ₱10.00 plus your
bet), and if it is green or orange you will win nothing and your bet will be given to
you. But if the result is white, your money will be tripled (you will win an additional

112
₱20.00 plus your bet. If X denotes the net gain of a player what is the expected value
of a ₱10.00 bet?
Practice Activity 3

Insurance Investment Problem

A life insurance company will sell a ₱250,000.00 one-year term life insurance
policy for members of armed forces of the Philippines for a premium of ₱500.00. Let
X denote the net gain from the insurance company. Based on the collected data of
the company, a member of the armed forces police has a 99.96% chance of surviving
within one year. Let X the net gain of an insurance company from a single
policyholder.

a. Complete the table below showing the probability distribution of X.

𝑥 500 -249,500
𝑃(𝑥)
b. Find the expectation if you play a bet and interpret the result.

𝐄(𝐱) = _______________

Interpretation:_____________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Independent Assessment 3

Body Parts Insurance

An insurance company will sell a ₱500,000.00 one-year term leg insurance
policy for ramp models for a premium of ₱1,000.00. Find the expected value to the
company of a single policy if a model has a 99.97% chance of being uninjured in one
year?

Compare your answers with those found in the Answer Key on the last part of
this module. Did you get all items correct? Great! If you did, you learned the lesson
well. If you were not able to get the correct answer, review your computations.
What I Have Learned
A. Complete the following statements by writing the correct word or words and
formulas.
1. The mean of a discrete random variable X is also called the _________________.
2. The expected value is the _______________ value of a random variable over
numerous trials of an experiment.
3. The formula to find the mean or expected value of a discrete random variable is
___________________.
4. The _________________ and __________________ of a discrete random variable X
indicate the variability of X over a large number of experiments or trials.
B. In your own words, write the different steps on how you can solve real-life problems
involving mean or expected value.

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

113
What I Can Do
Raffle for a Cause!
Things to do:
Make a plan for a Christmas raffle bonanza in which the PWD (Person with
Disability) will be the beneficiaries. The plan should consist of the number of tickets
to be sold, the amount per ticket, and the number of winners and their
corresponding prizes. Let X be the random variable representing your net gain per
ticket, and compute the expected value of X and the net gain if all tickets will be
sold out. Also, using your creativity prepare a sample of your ticket. You may use
the sample guide to complete your task.

Name of Project

Brief Description

Number of tickets to be sold

Price of ticket to be sold

Winners and prizes:

Expected Value of X:

(Please show the probability

distributions and your solution)
Net Gain of the Project:

Sample Ticket:

Rubrics for the task:

Categories 4 3 2 1
Excellent Satisfactory Developing Beginning

Organization of The name of The name of The name of The name of

Plan the project is the project is the project is the project is
appropriate somewhat somewhat not
and with clear appropriate appropriate appropriate
descriptions and with clear and vague and with
of the project. vague

114
 descriptions descriptions descriptions
of the project. of the project. of the project.

Accuracy of the The There is one There is one There are

Solutions computations mistake in the mistake in the more
are accurate computations computations mistakes with
with a table of with a table of with no table no table of
probability probability of probability probability
distributions. distributions. distributions. distributions.

Originality and Sample Ticket Sample Ticket Sample Ticket Sample Ticket
creativity is unique and is nice but not is just is just an
(Sample Ticket) shows unique and ordinary with ordinary and
creativity with with complete complete without
complete information. information. complete
information. information.

Assessment
Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Which of the following represents the expected value of the discrete random
variable?
A. mean C. mode
B. median D. variance
For numbers 2-3, refer to the table below:
𝑥 1 2 3 4
𝑃(𝑥) 1 3 2 1
5 10 5 10
2. What is the expected value of the given probability distribution?
2 2
A. 10
C.
5

12 12
B. 10
D.
5

3. What of the following best described the expected value of a probability

distribution?
A. It measures the variability of the values assumed by the random variables.
B. It gives the difference between the highest and lowest values assumed by
the random variables
C. It is the square root of the variance of the probability distribution.
D. It is the average value of a random variable over numerous trials of an
experiment.
For numbers 4-6, refer to the following:
One thousand tickets are sold for ₱50.00 each. One ticket will win ₱10,000.00, two
tickets will win ₱5,000.00 each and three tickets will win ₱1,000.00 each. Let X
denote the net gain from the purchase of a randomly selected ticket.
4. What is the probability that you will win a prize if you buy two tickets?
2
A. 2 C.
1000

2 998
B. D.
500 1000

115
5. Which of the following tables of values shows the probability distribution of X?

A. x 10,000 5,000 1,000 -50

P(x) 1 2 3 994
1000 1000 1000 1000

B. x 10,000 5,000 1,000 -50

P(x) 1 2 3 1
999 998 997 999

C. x 9,950 4,950 950 -50

P(x) 1 2 3 994
1000 1000 1000 1000

D. x 9.950 4,950 1,000 -50

P(x) 1 2 3 1
999 998 997 999
6. What is the mean or the expected value of a person who buys a ticket?
A. - 25 C. 27
B. - 27 D. 25

For numbers 7-8, refer to the following:

You buy three ₱1,000.00 raffle tickets for a prize of a new 20-passenger Sarao
jeepney valued at ₱800, 000.00. Two thousand tickets are sold.

7. What is the probability of winning the prize in the purchase of three

tickets?
1 3
A. C.
2000 2000
2 4
B. D.
2000 2000
8. What is the probability that you will NOT win the prize? (refer to item 7)
3 997
A. C.
2000 2000
97 1997
B. D.
2000 2000
For numbers 9-11, refer to the following:
A roulette wheel in an amusement park has the numbers 1 through 60. If you bet
₱100.00 for a randomly chosen number from 1 to 60, you will have a chance to win
a cellular phone worth ₱5,000.00.
9. If X denotes the net gain from taking a chance to bet on a randomly
selected number. Which of the following tables of values shows the
probability distribution of X?
A. X 5000 -1000 C. x 60 -1
P(x) 1 59 P(x) 1 59
60 60 60 60
B. x 4900 -1000 D. x 100 -1
P(x) 1 59 P(x) 1 59
60 60 60 60

10. What is the mean or the expected value for those who take a bet?
A. – 10.12 C. -16.67
B. -15.40 D. -18.25

116
11. How much the organizer will earn if 100 games will be played?
A. ₱50,000.00 C. ₱150,000.00
B. ₱100, 000.00 D. ₱250,000.00

For numbers 12 -15, refer to the following:

A life insurance company will sell a 1 million three-year term life insurance policy
exclusive in a particular risk group for a premium of ₱2,000.00. Let X denote the
net gain to the company from the sale of one policy.
12. If a person in this risk group has a 99.95% chance of surviving within
three years, what is the probability that he will NOT survive within three
years?
A. 0.995 C. 0.005
B. 0.9995 D. 0.0005
13. How much is the net loss of the insurance company from a policyholder
if his family will avail of the insurance benefits?
A. ₱1,000,000.00 C. ₱998,000.00
B. ₱999, 000.00 D. ₱995,000.00
14. Which of the following tables of values shows the probability distribution of X, if
each policyholder has a 99.95% chance of surviving within three years?
A. x 2,000 -1,000,000 C. x 2000 -998,000
P(x) 0.9995 0.0005 P(x) 0.9995 0.0005
B. D.
x 1,000,000 2,000 x 2000 -998,000
P(x) 0.9995 0.0005 P(x) 0.9995 0.0005
15. Find the expected value to the company of a
single policy?
A. ₱1,500.00 C. ₱1,800.00
B. ₱1,690.00 D. ₱1,950.00
Additional Activities
If you want to try more, these activities are for you. It will help you to practice your
skill in solving real-life problems involving mean or expected value and to make wise
decisions on matters like taking a chance in lottery, starting your own business and
considering investment.
Study and analyze each situation to solve the problem.
1. Game of Chance (Lottery)
A lotto works by picking 6 numbers from 1- 42 (Combinations of numbers from 1-42
taken 6 at a time produce 5,245,786 number combinations). A ticket costs ₱24.00 to
play the lottery. If you win today, you would win 5 million pesos after taxes. If you
play the lottery today, what would be your expected winnings or losses?
2. Business Opportunity
The net gain for a day of Joy in a Cup Bread and Pastry Shop depends on the
number of cupcakes sold within a day. If X is the amount of income within a day for
five consecutive days. Compute the mean or expected earnings for a day and the
variance. The probability of X is shown below.

𝑥 5000 4500 4000 3500 3000

𝑃(𝑥) 0.20 0.16 0.31 0.17 0.16

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3. Investment
A person may earn ₱100,000.00 by investing in the stocks of an international
company with a probability of 0.40 or lose ₱35,000.00 over the same period with a
probability of 0.60. Let X denote the net gain of a person who will invest in the
company, construct the probability distribution of X, and compute for the expected
value of a person who will invest in the same company. Interpret the result
How well did you perform in this lesson?
Are you now ready for the next lesson?
If your answer is Yes, I am HAPPY for you. Good Luck and happy learning on your
next journey. 😊

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 Statistics and
Probability
Illustrating a Normal Random
Variable and its Characteristics
Statistics and Probability
Illustrating a Normal Random Variable and its Characteristics
First Edition, 2020

Republic Act 8293, section 176 states that: No copyright shall subsist in any work of the Government of the
Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for
exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names, trademarks, etc.) included in this
module are owned by their respective copyright holders. Every effort has been exerted to locate and seek permission to use
these materials from their respective copyright owners. The publisher and authors do not represent nor claim ownership over
them.

Published by the Department of Education

Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Writers: Elson A. Valencia
Editors: Celestina M. Alba and Nestor N. Sandoval
Reviewers: Irlo L. Dumo, Nenita N. De Leon and Ma. Theresa B. Yanto
Illustrator: Kelvin A. Ramintas and Dhojie N. Yanto
Layout Artist: Ronnjemmele A. Rivera
Management Team: Wilfredo E. Cabral, Job S. Zape Jr., Elaine T. Balaogan, Fe M. Ong-ongowan, Catherine P. Talavera,
Gerlie M. Ilagan, Buddy Chester M. Repia, Herbert D. Perez, Lorena S. Walangsumbat, Jee-Ann O. Briones
Celestina M. Alba, Asuncion C. Ilao

Department of Education – Region IV-A CALABARZON

Office Address: Gate 2 Karangalan Village, Barangay San Isidro

Cainta, Rizal 1800
Telefax: 02-8682-5773/8684-4914/8647-7487
E-mail Address: region4a@deped.gov.ph

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 Week

3
What I Need to Know
This module was designed to help you as a learner to illustrate the normal random
variable and its characteristics. You can also learn how a normal curve used in our
daily life through the application of the concepts of an empirical rule to approximate
the percentage of the random variables in the distribution. It is easy to understand
the functions or uses of normal distribution because the examples and problems are
based on the situations that we experience nowadays
In a previous module, you have learned about the Random Variable and its
Classification It also discussed the Probability Distributions of Discrete Random
Variables. This time, you will focus on the Normal Probability Distribution, also
called Normal Curve which is used to determine the probabilities of a continuous
random variable. On the other hand, the knowledge, skills, and attitude you acquired
about the percentage, mean and standard deviation is very useful to attain the target
objectives of this module

After going through this module, you are expected to:

1. define a normal random variable;
2. illustrate a normal random variable and its characteristics; and
3. state and apply the concepts of the empirical rule or 68% -95%-
99.7% of the distribution.

What I Know
Let us see how far you will go and how much you know about this pretest. Please
answer all questions with your best and utmost honesty so that we can gauge your
learning in the target competency of this lesson. Let’s get started!

Direction: Read and analyze each item carefully. Choose the letter of the best answer.
Write the chosen letter on a separate sheet of paper.
1. The total area under the normal curve is _________.
A. -1 B. 0 C. 0.5 D. 1
2. The normal curve is bell-shaped.
A. False B. True C. Sometimes D. It depends
3. Which part of the normal curve is extended indefinitely in both directions along
the horizontal axis, approaching but never touching it?
A. center B. tail C. top D. spread
4. According to the property of a Normal Probability Distribution, the mean is equal
to what measures of central tendency?
A. median B. mode C. both A and B D. only A
5. Which of the following rules state that almost all data fall within the 1, 2, and 3
Standard Deviation of the Mean when the population is normally distributed?
A. Empirical rule
B. Lottery rule
C. Pascal’s triangle rule
D. Sampling rule
6. Under the curve, the area to the left of the mean is_________
A. 30% B. 47.72% C. 50% D. 68%

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7. Using the empirical rule, the area under the normal distribution curve that lies
within three standard deviations from the mean is approximately 95%.
A. False
B. True
C. Sometimes
D. None of the Above
8. Which of the following statements is CORRECT about the shape of the normal
curve?
A. The shape of the normal curve is based on the given Mean and Standard
Deviation of the distribution.
B. The shape of the normal curve is based on the given Mean and Median of
the distribution.
C. The shape of the normal curve is based on the given area and standard
Deviation of the distribution.
D. All of the above
9. Which of the following graphs is the BEST example of the normal curve?
A. B. C. D.

10. Based on the empirical rule, the bell-shaped distribution will have
approximately 68% of the data within what number of Standard Deviations
from the mean?
A. 0 B. 1 C. 2 D. 3
11. If the average age of retirement for the population in the Philippines is 65 years,
with a standard deviation of 5 years, what is the approximate age range in
which 68% of people retire?
A. 60 – 70 years B. 55 – 65 years C. 55 – 60 years D. 60 -65 years
12. If the mean and the standard deviation of a continuous random variable that is
normally distributed are 10 and 3 respectively, find an interval that contains
68% of the distribution.
A. [7, 13] B. [4, 13] C. [7, 16] D. [3, 10]
13. According to the 68%-95%-99.7% rule or better known as an empirical rule, the
standard deviation and mean interval that covers approximately 95% of the
data from a frequency distribution is____
A. 2µ ± 2ơ B. µ ± ơ C. µ ± 2ơ D. µ ± 3ơ
14. The first quarterly assessment result of Grade 11- HUMSS students in their
Statistics and Probability subject had scored with a mean of 40 and a
standard deviation of 8. A histogram of the data shows that the distribution is
normal.
Use the Empirical Rule to find the percentage of scores between 24 and 32.
A. 13.5% B. 68% C. 81.5% D. 95%
15. Suppose the distribution of data about the recovered victims of COVID 19
daily has a mean of 145 and a standard deviation of 22. How many standard
deviations away from the mean is a value of 101?
A. It is one standard deviation above the mean.
B. It is one standard deviation below the mean.
C. It is two standard deviations above the mean.
D. It is two standard deviations below the mean.
How did you find this pretest? Did you encounter both familiar and unfamiliar
terms, symbols, and notations? Kindly compare your answer in the Answer Key on
the last part of this module.
If you obtain 100% or a perfect score, skip the module and immediately move
to the next module. While in the event you missed a point, please proceed with the

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module as it will enrich your knowledge in the normal distribution, especially in
illustrating the normal random variables and its characteristics.
Lesson 1 Illustrating the Normal Random
Variable and its Characteristics
Did you take a National Achievement Test or any Placement Tests? How about
measuring your height and weight during the first week of your PE class to know
your Body Mass Index? Have you ever tried to determine the location or make an
inference about your grades, height, or weight in the distribution? If not, this lesson
will teach you how to appreciate the importance of knowing the answer to those
questions?
What’s In
Let’s have a review first. Read the following statements carefully and determine
whether it is TRUE or FALSE. Write the word TRUE if it is correct and FALSE if it is
incorrect, then modify the statement to make it true.

________________1. Probability is the value greater than or equal to zero but less
than or equal to one.
________________2. Discrete variables are the infinite numerical values like heights,
weights, distance and length
________________3. 34% is also equal 0.34.
________________4. Mean, mode and standard deviation are the measures of central
tendency.
________________5. Mean is equal to the summation of scores divided by the
number of cases.
What’s New
A. The distribution of the height (X) in centimeter (cm) of the 16 teachers of SCNHS
was presented below. Construct a histogram for the random variable (X).

X F
138 1
139 2
140 3
141 4
142 3
143 2
144 1

B. The following items show four pictures captured by the author during
his travel in the different places and constructed using GeoGebra
application which represents a common object. Analyze the group of
pictures carefully then identify the common object they
represent. Write your answer by filling in the empty boxes below
each item. A hint is also provided for you.

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 1. 2.

3.

4. 5.

Can you define or describe each word that you have obtained in this activity?

1. ____________________________________________________________

2. ____________________________________________________________

3. ____________________________________________________________

4. ____________________________________________________________

5. ____________________________________________________________
What is it
How do you find the activity? How can you describe the graph you have made in
Activity A? Are the terms or words you obtained in Activity B will describe the graphs
in Activity A?

In the activity above, the distribution of the height of the teachers is one of the
examples of the distribution of a normal random variable because the set of
numerical values is normally distributed. Height is also described as a continuous
random variable. You have also noticed that the mean of the distribution can be
found at the center which is 141 cm and the distribution from the center to the right
is a mirror of the distribution to the left as shown in the figure and table below. See
Figure 1.

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 Normal Probability Distribution is a probability distribution of continuous
random variables. It shows graphical representations of random variables obtained
through measurement like the height and weight of the students, the percentile
ranks of the A&E (Accreditation and Equivalency) Test result of the Alternative
Learning System students, or any data with infinite values. It is used to describe the
characteristics of populations and help us visualize the inferences we make about
the population. It also used to determine the probabilities and percentile of the
continuous random variables in the distribution. For example, your grades in
Mathematics is one of the scores in the distribution, you can predict the location of
that score in the distribution and interpret it with regards to the mean and standard
deviation.
Properties of Normal Curve
The graphical representation of the normal distribution is popularly known as
a normal curve. The normal curve is described clearly by the following characteristics
1. The normal curve is bell-shaped.
2. The curve is symmetrical about its center. This means that, if we draw a
segment from the peak of the curve down to the horizontal axis, the segment
divides the normal curve into two equal parts or areas.
3. The mean, median, and mode coincide at the center. This also means that in
a normal distribution, or a distribution described by a normal curve, the
mean, median, and mode are equal.
4. The width of the curve is determined by the standard deviation of the
distribution.
5. The tails of the curve are plotted in both directions and flatten out indefinitely
along the horizontal axis. The tails are thus asymptotic to the baseline. A
portion of the graph that is asymptotic to a reference axis or another graph is
called an asymptote, always approaching another but never touching it.
6. The total area under a normal curve is 1. This means that the normal curve
represents the probability, or the proportion, or the percentage associated with
specific sets of measurement values.

To visualize and understand the properties/characteristics of a normal curve,

please refer to figure 2, as shown below.

Fig. 2: Graph of a Normal Curve

A normally distributed random variable with a mean µ = 0 and standard

deviation ơ = 1 is called a standard normal variable. It is presented using standard
normal distribution where the center of the curve is zero, which is mean and added
one unit from the center to the right and subtract one unit from the center to the
left. This is shown below in figure 3.

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 Fig. 3: Standard Normal Distribution

The shape of a normal curve is based on the two given parameters, the mean
and the standard deviation of the distribution. When comparing two distributions
each described by the normal curve, the following are the three situations based on
the said parameters
a. When the means are not equal, but the standard deviations are equal. (µ 1
≠ µ2 ; ơ1 =ơ2 ), the curves have a similar shape but centered at different
points, as shown in figure 4.

Fig. 4: The Mean are Not Equal, but the Standard

Deviations are Equal.
b. When the means are equal, but the standard deviations are equal. (µ 1 = µ2
; ơ1 ≠ ơ2 ), the curves are centered at the same point but they have different
height and spreads. as shown in figure 5.

Fig. 5: The Mean are Equal, but the Standard

Deviations are Not Equal.

c. When the means are different and the standard deviations are also
different (µ1≠ µ2 ; ơ1 ≠ ơ2 ), the curves are centered at different points and
vary in shapes, as shown in figure 6.

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 Fig. 6: The Means are Different and the Standard
Deviations are also Different
EMPIRICAL RULE

You can easily understand the functions of normal probability distribution in

our real-life world using the empirical rule. Because this rule is used to roughly test
the distribution’s normality, if many data of a random variable fall outside the lower
and upper limits of the three-standard deviation, this means that the distribution is
not normal.
The empirical rule is better known as 68% - 95% - 99.70% rule. This rule
states that the data in the distribution lies within one (1), two (2), and three (3) of the
standard deviation from the mean are approximately 68%, 95%, and 99.70%,
respectively. Since the area of a normal curve is equal to 1 or 100% as stated on its
characteristics, there are only a few data which is 0.30% falls outside the 3-standard
deviation from the mean. For instance, the distribution of the grades of the Senior
High School students in Statistics and Probability for the Third Quarter is shown
below in Figure 7.

Fig.7. Distribution of the Grades of the SHS Students in Statistics and

Probability for the Third Quarter

Using the empirical rule, you can say that the distribution of the grades of the
Senior High School in Statistics and Probability are distributed normally because the
shape of the graph is bell-shaped and symmetric about its mean, which is 87. This
also indicates that most of the students’ grades fall close to the mean and fewer of
them are far below and/or above the mean
It can summarize the distribution in the following percentage:

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  68% of data lies within 1 standard deviation from the mean have a
grade of 83 to 91
 95% of data lies within 2 standard deviations from the mean have a
grade of 79 to 95
 99.70% of data lies within 3 standard deviations from the mean have a
grade of 83 to 9
Illustrative Example 1:
The scores of the Senior High School students in their Statistics and
Probability quarterly examination are normally distributed with a mean of 35 and a
standard deviation of 5.
Answer the following questions:
a. What percent of the scores are between 30 to 40?
b. What scores fall within 95% of the distribution?
Solution:
Draw a standard normal curve and plot the mean at the center. Then, add the
standard deviation to the mean once and mark it to the right of the mean. Add twice
the standard deviation to the mean and put it to the right of the first sum. Then, add
thrice the standard deviation to the mean and mark it to the right of the second sum.
Do the same to the left. This time, instead of adding, subtract the standard deviation
from the mean. An illustration is provided below in figure 7:

Fig. 7: Distribution of Scores of Senior High School Students

Answer:
a. The scores 30 to 40 falls within the first standard deviation from the mean.
Therefore, the scores that fall between 30 and 40 is approximately 68% of
the distribution.
b. Since 95% of the distribution lies within 2 standard deviations from the
mean, then the scores corresponding to this area of the distribution are
scores from 25 up to 45.
Illustrative Example 2:
The district nurse of Candelaria East needs to measure the BMI (Body
Mass Index) of the Alternative Learning System students. She found out
that the heights of male students are normally distributed with a mean of
160 cm and a standard deviation of 7 cm. Find the percentage of male
students whose height is within 153 cm to 174 cm.

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Fig. 8: Distribution of BMI of the Alternative Learning System Students

Solution: The mean of this problem is 160, it is subtracted by 7 to the left (e.g. 160
-7 = 153; 153-7 = 146; 146 – 7 = 139) and add 7 to the right. (e.g. 160 + 7 = 167; 167
+ 7 = 174 + 7 = 181).

As stated in figure 8, 153 cm falls at 1 standard deviation from the mean to

the left and the height of 174 cm falls at 2 standard deviations from the mean to the
right. Therefore, it covers the whole 68% and 13.5%. of the distribution and the sum
of it is 81.5%

ANSWER: 81.5% of the male students have a height between 153 cm to 174 cm.
What’s More
Activity 1.
A. True or False. Write the word TRUE if the statement is correct and FALSE
if the statement is incorrect
_______1. The total area of the normal curve is 1.
_______2. Normal probability distribution is used to determine the
probabilities of a discrete random variable.
_______3. The mean, median and mode in a normal distribution have
the same value.
_______4. The distance of the number in the horizontal line or the x-axis
should always proportional.
_______5 The normal probability distribution has a mean µ = 1 and
standard deviation ơ = 0.
Activity 2

A. Use Empirical rule to complete the following table. Write on the respective
column the range or interval of the scores based on the given parameters.

Mean Standard Deviation 68% 95% 99.7%

Ex 50 3 47 to 53 44 to 56 41 to 59
1 135 28
2 87 5.5
3 213 15
4 567 20
5 785 29
B. Illustrate the distribution in Activity 2.A through a diagram.

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Activity 3.
Read and analyze the following problem to answer the question.
The government launched Enhanced Community Quarantine on March 15,
2020, as a preventive measure to fight the spread of COVID-19 in the country. Many
of us experienced difficulties in getting our daily needs like food or getting money to
pay for our bills and rentals. Our government gave financial support and food, but it
is not enough for the people. Fortunately, we are blessed because the spirit of love
and generosity is still present in the heart of our fellow countrymen. They donated
money, food, time, and other essential things.
Suppose you and your friends conducted a donation-drive in your barangay.
Each of the donors gave a certain amount with an average of Php 320.00 and a
standard deviation of Php 60.00. Assuming, it is normally distributed,
1. What percentage of the distribution that the amount falls between Php.
260.00 and Php 380.00?
2. How much of the donations fall in 95% of the distributions?
3. How much of the donations fall in 99.70% of the distributions?

What I Have Learned

1. A normal random variable is a set of a numerical value of continuous random
variables which is normally distributed.
2. Normal Distribution is a probability distribution of continuous random variables.
It also represents the probability, or the proportion, or the percentage associated
with specific sets of measurement values.
3. A normal curve has the following characteristics:
a. It should be bell-shaped and symmetric about its center.
b. Both sides of the tails of a normal curve do not touch the horizontal axis.
c. In the horizontal axis, use 0 at the center where the mean is located and
use 1, 2, and 3 to the right and -1, -2 and -3 to the left. But still,
remember there is an integral part of each number. However, it is not
limited to the -3 and 3, it is extended indefinitely
d. The distances between numbers in the horizontal line or the x-axis are
always equal.
4. Empirical rule. This rule states that the data in the distribution lies within the 1,
2, and 3 of the standard deviation of the mean.
5. Sixty-eight percent (68%) of data lies within 1 standard deviation from the mean.
6. Ninety-five percent (95%) of data lies within the 2-standard deviation from the
mean.
7. Ninety-nine and seven-tenths percent (99.70%) of data lies within the 3-standard
deviation from the mean.

What I Can Do
MAKE A SURVEY

Materials Needed
1. Cellphone` 4. Calculator
2. Computer/Laptop 5. Short Bond Paper
3. Pen/pencil
Instructions
1. Contact at least 20 of your classmates through SMS or messenger apps.

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2. Ask them for the result of their pre-test (What I Know) or pre-assessment
of this module
3. Compute the mean and standard deviation of the collected data includes
your own score.
4. Use the empirical rule, to answer the following questions
a. What is the interval or range of scores falls within 68%?
b. What is the interval or range of scores falls within 95%?
c. What is the interval or range of scores falls within 99.7%?
d. What is the interval or range of scores falls within 81.5%?
e. In which interval away from the mean does your score belong?
5. Illustrate the distribution of the data you obtained from this survey through a
diagram and put a mark on the interval where your score located.
RUBRICS
Assessment
Direction: Read and analyze each item carefully. Choose the letter of the best answer.
Write the chosen letter on a separate sheet of paper.
1. What is half of the total area of the normal curve?
A. -1 B. 0 C. 0.5 D. 1
2. What is the shape of a Normal Probability Distributions?
A. bar B. bell C. circle D. line
3. Which part of a normal curve is asymptotic with the horizontal axis?
A. center B. curve C. tail D. top
4. Which of the following statements is the characteristic of a normal probability
distribution?
A. The three measures of central tendency such as mean, mode, and median
are equal.
B. The three measures of central tendency such as mean, mode, and median
are not equal
C. The two measures of central tendency such as mean and mode are equal
while the median is greater than zero
D. The two measures of central tendency such as mean and mode are equal
while the median is less than zero.
5. Which of the following statements describe the concepts of empirical rule?
A. It states that the data in the distribution lies within one (1), two (2), and
three (3) of the standard deviation from the mean are approximately 68%,
95% and 99.70%, respectively .
B. It states that the data in the distribution lies within 100%.
C. It states that the data in the distribution lies within one (1), two (2), and
three (3) of the standard deviation from the mean are exactly 68%, 95%
and 99.70%, respectively.
D. It states that the data is asymmetric.
6. Under the curve, the area to the right of the mean is_________
A. 30% B. 47.72% C. 50% D. 68%
7. Which of the following parameters is the basis of the shape of the normal
curve?
A. mean B. standard deviation C. Variance D. Both A and B
8. What is the equivalent of the mean of the following graph?

A. 0 B. 1 C. 2 D. 3

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9. Using the empirical rule, the area under the normal distribution that lies within
three standard deviations of the mean is approximately_____.
A. 68% B. 95% C. 97% D. 99.7%
10. Based on the empirical rule, the bell-shaped distribution will have
approximately 68% of the data within what number of standard deviations of
the mean?
A. 0 B. 1 C. 2 D, 3
11. If the average age of retirement for the population in the Philippines is 65 years
and with a standard deviation of 5 years, what is the approximate age range in
which 95% of people retire?
A. 60 – 70 years B. 55 – 65 years C. 55 – 60 years D. 55- 75 years
12. If the mean and the standard deviation of a continuous random variable that is
normally distributed are 10 and 3, respectively, find an interval that contains
99.7% of the distribution.
A. [7, 16] B. [4, 16] C. [7, 16] D. [1, 19]
13. According to the 68%-95%-99.70% rule, the standard deviation and mean
interval that covers approximately 99.70% of the data from a frequency
distribution is____
A. 2µ ± 2ơ B. µ ± ơ C. µ ± 2ơ D. µ ± 3ơ
14. The first quarterly assessment result of Grade 11- STEM students in their
Statistics and Probability subject had scored with a mean of 40 and a standard
deviation of 8. A histogram of the data shows that the distribution is normal.
Use the Empirical Rule to find the percentage of scores between 24 and 48.
A. 13.5% B. 68% C. 81.5% D. 95%
15. Suppose that distribution of data about the number of deaths of COVID 19
positive has a mean of 45 and a standard deviation of 18. How many standard
deviations away from the mean is a value of 81?
A. It is one standard deviation above the mean
B. It is two standard deviations above the mean
C. It is one standard deviation below the mean
D. It is two standard deviations below the mean
Additional Activities
Read the following problems carefully. Apply the empirical rule and illustrate your
answer through a diagram.
1. IQ scores of the ALS students in the Division of Quezon are normally
distributed with a mean of 110 and a standard deviation of 10.
a. What percent of the distribution falls within the IQ scores of 100 to 130?
b. What percent of the distribution falls within the IQ scores of 90 to 140?
2. A normal distribution of data has a mean of 78 and a standard deviation of 9.
a. What scores fall within 68% of the distribution?
b. What scores fall within 95% of the distribution?

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