So take this example.
The number of ice creams sold per hour from Mr Fishy’s van is observed to be a Poisson random variable with parameter λ = 8. Each ice cream costs two pounds but Mr Fishy has to pay five pounds per hour for the pitch. What is the variance of his hourly profit?
Now I think this is a perfect example to illustrate how badly I understand the poisson distribution. I took λ = 8 and multiplied it by 2. Then took away £5 to get £11. It was wrong.
Can someone please explain where I went wrong?