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anonimnystefy
2013-04-11 19:05:39

E[Y1|Y1<x] just means the the expected value of Y1, if Y1 can take values only below x.

Karimazer1
2013-04-11 07:33:13

Hey!

I am having real trouble with this, the topic is not on this concept itself, but we have to use knowledge of it to answer questions in our area.

I am having real trouble understanding it.

So we have the general rule in our example:

G(x) = E[Y1 | Y1 < x] (this is apparantly the expected value, given the assumptions which i dont really understand how they got to this statement itself)

But anyway, so this is the rule we should use. Then in our example, we have:
F(x)=x and G(x)=x^N-1

Hence: expected value = (x^N-1) * ((N-1)/N) * x

= ((N-1)/N)* x^N

Now I understand how to simplify the above to get the bottom answer, but I do not understand the condition probability, then with the example, how to get the answer....