Question

The payoff (Y) for a lottery game has the following probability distribution.Payoff, XProbability$00.8$50.2What is the expected payoff?

Answer 1

`\begin{gathered} \text{Expected payoff}=\Sigma X\cdot P(X) \\ \\ \text{Expected payoff}=0\cdot0.8+5\cdot0.2 \\ \text{Expected payoff}=0+1 \\ \text{Expected payoff}=1 \end{gathered}`

Then, the expected payoff (expected value) from the given probability distribution is $1