Asked by Nathan Jermain on Sep 24, 2024
Verified
Four possibilities have probabilities 0.4,0.2,0.2 and 0.2 and values $80,$30,$0,and -$80 respectively.The expected value is:
A) $22
B) $24
C) $26
D) $28
Probabilities
The quantification of how probable an event is to happen, represented by a numerical value ranging from 0 to 1.
Expected Value
A calculation used in statistics and probability to determine the average outcome when the future includes scenarios that may or may not happen.
Values
Fundamental beliefs or guiding principles that influence the behaviors and decision-making processes of individuals or organizations.
- Determine potential financial outcomes, be they positive or negative, in different commercial and playful contexts.
Verified Answer
IW
Iesha Wilson1 day ago
Final Answer :
A
Explanation :
To find the expected value, we multiply each value by its probability and add them up.
Expected value = $80(0.4) + $30(0.2) + $0(0.2) + (-$80)(0.2)
Expected value = $32 + $6 - $16
Expected value = $22
Therefore, the best choice is A.
Expected value = $80(0.4) + $30(0.2) + $0(0.2) + (-$80)(0.2)
Expected value = $32 + $6 - $16
Expected value = $22
Therefore, the best choice is A.
Learning Objectives
- Determine potential financial outcomes, be they positive or negative, in different commercial and playful contexts.