Question

In a game​ show, a contestant receives a prize that has a ​% chance of being worth ​$ and a ​% chance of being worth ​$. What is the expected value of winning a​ prize?

Answer 1

112

Explanation:

Expected Value is anticipated value, calculated by multiplying each of possible outcomes with their probability of occurrence.

If Price has = 60% chance of value 120 , & 40% chance of value 100

Expected Value = Sum ( Probability of outcome x Payoff )

E (X) = Σ [ xi . PR ( xi ) ] = x1. Pr (x1) + x2 . Pr (x2)

= 0.6 (120) + 0.4 (100) = 72 + 40

= 112