Properties of Expected Value:

• If X is a random variable and a and b are constants (i.e. not random), then

a. E(b) = b.

b. E(aX) = aE(X).

c. E(aX + b) = aE(X) + b

• If X and Y are random variables, then

E(X + Y) = E(X) + E(Y)

E(X – Y) = E(X) – E(Y)