E1.4. Expectation and Variance of a Random Variable (Econometrics Math)

This video defines expectation and variance of a random variable and gives an example of how to compute expectation and variance. Throughout the video, I also demonstrate important results in the application of probability to econometrics: (1) expectations are linear, (2) expectations of an indicator function, (3) variance of a linear function, and (4) computational formula for the variance. This video is part of my series of videos on an introduction to econometrics. This is part of the math review.