Category: Dependence, Correlation, and Conditional Expectation

So far, when dealing with a sequence of random variables, we always assumed that they were independent. At last, we investigate the issue of dependence. To get the basic intuition, consider the hypothetical demand data in Table 8.1. Table 8.1 Demand data for two items: Are they independent? Can we say that the two random variables D1 and D2 are independent?…