Question

In a game you will win $50 with 0.25 probability, lose $20 with 0.3 probability, and lose $10 with 0.45 probability. What is the expected value of playing the game?

Answer 1

The expected value of playing the game is the mean calculated by the following formula
E(X)=Sum of (Value*Probability)=50*0.25-20*0.3-10*0.45=2.
Answer: the expected value of playing the game is $2.