I have a problem that I'm stuck on.
The question is: calculate var(x+500+(1.08)y).
I tried just doing var(x) + 1.08^2(var(y)) thinking that they were independent...
The part I'm really confused about is why var(x+y) is different from var(x)+var(y).
I know the answer is 21816, but I have no idea how to get that.
any help is much appreciated, thanks!!