Question

Find the expected value of the winningsfrom a game that has the followingpayout probability distribution:Payout ($) 0 1 2 5 10Probability 0.12 0.2 0.38 0.2 0.1Expected Value = [?]Round to the nearest hundredth.

Answer 1

To find the expected value, we use

$\begin{gathered} E(X)=u_x=0\cdot0,12+1\cdot0,2+2\cdot0,38+5\cdot0,2+10\cdot0,1=0+0,2+0,76+1+1 \\ E(X)=2,96 \end{gathered}$

The expected value of the winnings is 2,96.