Question

Find the expected value of the winningsfrom a game that has the followingpayout probability distribution:Payout ($) 246810Probability 0.35 0.2 0.1 0.2 0.15Expected Value = [?]

Answer 1

The formula for the expected value from an event is given as;

`\text{Expected value=}\sum ^{}_{}xPr(x)`

From the table given, we can obtain the expected value of winning as;

`\text{Expected value=}2(0.35)+4(0.2)+6(0.1)+8(0.2)+10(0.15)=5.2`

Therefore, the expected value of winning is $5.2