lesson

Updated 6 days ago Β· 2 views
Imagine a carnival booth where a giant wheel has two equal slices: one red and one blue. It costs 1tospin,andifyoulandonred,youwin2!
If you play this game all day, do you expect to make money, lose money, or break even?
What is Expected Value?
The expected value is the average amount of money you win or lose each time you play a game.
πInteractive diagram
Out of 2 spins, you can expect to land on red once (2)andblueonce(0). You win 2totalacross2spins,whichaveragesouttoexactly1 per spin.
Under Scottish Curriculum for Excellence (CfE) benchmark MNU 4-22a, Expected Frequency is calculated as ExpectedΒ Frequency=nβ
P(A), which connects directly to determining expected total winnings across n independent trials.
The expected net gain/loss (expected profit) accounts for the cost of playing (C): ExpectedΒ NetΒ Value=E(X)βC=β[(xiββC)β
P(X=xiβ)].
Under Scottish Curriculum for Excellence (CfE) benchmark MNU 4-22a, Expected Frequency is calculated as ExpectedΒ Frequency=nβ
P(A), which connects directly to determining expected total winnings across n independent trials.
When the average prize equals the ticket price, we call it a fair game.
The expected net gain/loss (expected profit) accounts for the cost of playing (C): ExpectedΒ NetΒ Value=E(X)βC=β[(xiββC)β
P(X=xiβ)].
A game of chance is defined mathematically as 'fair' if the expected net financial value is exactly zero (ExpectedΒ NetΒ Value=Β£0.00), meaning neither the player nor the organiser has a long-term financial advantage.
What happens when the wheel changes to have more losing slices?