Given thatisthe mean and σ2is the variance of n observations x 1, x 2x n . Prove that the mean andvariance of the observations ax 1, ax 2,ax 3ax n are and a 2 σ2,respectively (a ≠ 0).

The givenn observations are x1, x2xn.

Mean =

Variance =σ2

If eachobservation is multiplied by a and the new observations areyi, then

Therefore,mean of the observations, ax1, ax2axn, is .

Substitutingthe values of xiand in(1), we obtain

Thus, thevariance of the observations, ax1, ax2axn, is a2 σ2.

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