Confirm that the second equality in (2.29) indeed holds. (2.29) Var[X] = E[(X E[X])] = E[X]

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Confirm that the second equality in (2.29) indeed holds.

(2.29)

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A First Course in Quantitative Finance

ISBN: 978-1108419574

1st edition

Authors: Thomas Mazzoni

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Question Posted: Nov 12, 2018 05:43 AM

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Confirm that the second equality in (2.29) indeed holds. (2.29) Var[X] = E[(X E[X])*] = E[X*]

Question:

Var[X] = E[(X – E[X])*] = E[X*] – E[X]²

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Use that EX is simply a ...View the full answer

A First Course in Quantitative Finance

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Confirm that the second equality in (2.29) indeed holds. (2.29) Var[X] = E[(X E[X])] = E[X]

Var[X] = E[(X – E[X])] = E[X] – E[X]²