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    Moment generating function and poisson distribution

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    ** Please see the attached file for the complete solution **
    Shirley runs a real estate company. She counts the total number of flats that she sells everyday. Let X_t be the total number of flats she sells on day t (t=1,2,...,7), and let X be the total number of flats she sells for the week. Suppose X_t are independent and identically distributed Poisson distribution with expectation theta.

    (Please see the attached file)
    (a) Find the moment generating functions for X_1 and X

    (b) Show X has a Poisson distribution with mean 7*theta

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    Solution Preview

    Please refer to the pdf attached.

    a) Let us recall the definition for the moment generating function for a random variable
    (please see the attached file) With this in mind, let us find the moment generating function for X_1 first. By definition, since X_1 can only take values from 0, 1, ...

    Solution Summary

    This solution provides a step-by-step calculation of the moment generating function, and illustrates how to use the moment generating function to determine the probability distribution.