Let X and Y be independent random variables with X having the t distribution with five degrees of freedom and Y having the t distribution with three degrees of freedom We are interested in E( X Y ) a Simulate 1000 pairs of (Xi, Yi) each with the above joint distribution and estimate E( X Y ) b Use ...

a I simulated 1000 pairs three times and got the following average valu ...

Let X and Y be independent random variables with X having the t distribution with five degrees

Question:

Let X and Y be independent random variables with X having the t with five degrees of freedom and Y having the t with three degrees of freedom. We are interested in E(|X − Y |).
a. Simulate 1000 pairs of (Xi, Yi) each with the above joint and estimate E(|X − Y |).
b. Use your 1000 simulated pairs to estimate the variance of |X − Y | also.
c. Based on your estimated variance, how many simulations would you need to be 99 percent confident that your estimator of E(|X − Y|) is within 0.01 of the actual mean?
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...