Question

I got zero, but that’s wrong.

I multiplied-25,000 x 40% and 25,000 x 25% and 40,000 x 35%

They all were zero. Can you help me figure out where I went wrong?

Answer 1

Expected value is 4,000

Explanation:

To find expected value ⇒ multiply the value by it's probability

40% × ( -25,000 ) = - 10,000

Breaking means neither add nor subtract a given amount

20% × 0 = 0

35% × 40,000 = 14,000

∴ Expected value = -10,000 + 14,000 = 4,000

LOSS: -10,000

BREAK EVEN: 0

WIN: 14,000

Expected value is 4,000

hope this helps....