Expected value is the sum of the product of all possible outcomes and the respective probability.
Example of rolling one six-sided die:
Payout equals the number appearing on top face.
expected value =
1*1/6+2*1/6+3*1/6+4*1/6+581/6+6*1/6
=3.5
In a game, you have a 1/27 probability of winning $100 and a 26/27 probability of losing $4. What is your expected value?
1 answer
1 answer