# 9.3 Properties of Expected Values

We often add a constant to a random variable or multiply a random variable by a constant. For example, suppose the computer shipper in 4M Analytics 9.1 has to pay fee of \$1,000 to an agent who found this customer. In this case the net profits are not X dollars, but X - \$1,000. Similarly, we often multiply random variables by constants. The car shop that sells tires makes a sale of Y tires to a customer. If the shop charges \$5 to mount each tire, then the mounting charge for a sale of Y tires is \$5 × Y.

What are the mean and standard deviation of these quantities? We don’t need to start over by defining a new random variable. An easier approach uses the properties of the random variables that we already have. ...

Get Statistics for Business: Decision Making and Analysis, 3rd Edition now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.