Suppose that A, B and C are uncorrelated random variables with means u1, u2, u3 and standard deviation s1, s2 and s3 respectively. If X=A+B and Y=B+C, what is the correlation of X and Y?
Is E(XY) in this case equal to E((A+B)(B+C)) = E(AB + AC+BB + BC) = E(AB) + E(AC) + E(BB) + E(BC)?
I am not sure about this step.
If this step is correct, I can find correlation by finding E(XY) minus the product of mean of X and mean of Y and divide that by the product of the standard deviation of X and the standard deviation of y
I would greatly appreciate your help.
Yes
If you have the brackets in the right place in that statement yes.If this step is correct, I can find correlation by finding E(XY) minus the product of mean of X and mean of Y and divide that by the product of the standard deviation of X and the standard deviation of y
CB