Exercise · ZW-EXPECTED-VALUE-004 · ★★☆ Intermediate
In a game you win 10 pesos with probability 0.2 and lose 2 with probability 0.8. What is the expected gain, in pesos?
Choose one option.
Show answer
- B. \(0.4\)
Explanation
\(E=10(0.2)+(-2)(0.8)=2-1.6=0.4\). Forgetting the sign of the loss gives 3.6, and adding the values without weights gives 8.
Review the concept: Expected value
The expectation \(E[X]\) of a random variable \(X\) is the average of its possible values, each weighted by its probability.
\[\begin{aligned}E[X]&=\sum_x x\,p(x)\\ E[X]&=\int_{-\infty}^{\infty}x\,f(x)\,dx\end{aligned}\]
More practice problems: expected value
- ZW-EXPECTED-VALUE-001 X takes the values 0, 1 and 2 with probabilities 0.2, 0.5 and 0.3. Compute E[X].
- ZW-EXPECTED-VALUE-002 A fair die is rolled and X is the number shown. What is E[X]?
- ZW-EXPECTED-VALUE-003 X has density f(x)=2x on [0,1] and 0 elsewhere. Compute E[X].
- ZW-EXPECTED-VALUE-005 If E[X]=3, what is E[2X+5]?
- ZW-EXPECTED-VALUE-006 With f(x)=2x on [0,1], compute E[X^2].
- ZW-EXPECTED-VALUE-007 Which statement about E[X] is correct?
- ZW-EXPECTED-VALUE-008 X equals -1, 0 or 1 with probabilities tfrac14,tfrac12,tfrac14. Compute E[X^2].
- ZW-EXPECTED-VALUE-009 Two fair dice are rolled and S is the sum. Using linearity, what is E[S]?