Exercise Solution 3.14

This is a bit of a trick question. Its purpose is to emphasize to you the general applicability of formula [3.28]. To solve the problem, recognize that Z = A + B. You know the standard deviations and correlation of A and B, so you can directly apply [3.28] to obtain a standard deviation for Z. The result is 4.74. The information that B = A² – 2A – 4 is extraneous.