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Question

If the moment-generating function of X is given by

M(t)=e500t+5000t2M(t) = e^{500t + 5000t^2}

, find P[27, 060 ≤ (X - 500)² ≤ 50,240].

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Given:

M(t)=exp(500t+5000t2)M(t)=\exp(500t+5000t^2)

DISTRUBITION\textbf{DISTRUBITION} XX

Moment generating function of the normal distribution:

M(t)=exp(μy+σ2t22)M(t)=\exp\left(\mu y+\dfrac{\sigma^2 t^2}{2}\right)

We then note that the moment generating function exp(500t+5000t2)\exp(500t+5000t^2) has the form of the moment generating function of the normal distribution with:

μ=500\mu=500

σ22=5000σ2=25000=10,000\dfrac{\sigma^2}{2}=5000\Rightarrow \sigma^2=2\cdot 5000=10,000

We then note that the XX has a normal distribution with mean 500 and variance 10,000\textbf{normal distribution with mean 500 and variance 10,000}.

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