Question

What two items must be identified to calculate expected value?

Answer 1

To calculate the expected value, two items must be identified: the probabilities of each outcome occurring and the values associated with each outcome. The expected value is calculated by multiplying each outcome value by its corresponding probability and summing up these products.

Step-by-step explanation:

In order to calculate the expected value, two items must be identified:

1. The probabilities of each outcome occurring.
2. The values associated with each outcome.

To calculate the expected value, multiply each outcome value by its corresponding probability, and then sum up these products.

For example, consider rolling a fair six-sided die. The probabilities of rolling each number are all 1/6, and the values associated with each outcome are the numbers 1 to 6. To calculate the expected value, you would multiply each outcome value (1, 2, 3, 4, 5, and 6) by its probability (1/6), and then sum up these products:

(1 * 1/6) + (2 * 1/6) + (3 * 1/6) + (4 * 1/6) + (5 * 1/6) + (6 * 1/6) = 3.5