# Calculating expected value

In probability theory, the expected value of a random variable, intuitively, is the long-run .. This is because an expected value calculation must not depend on the order in which the possible outcomes are presented, whereas in a conditionally. Your browser does not currently recognize any of the video formats available. Click here to visit our frequently. In this video, I show the formula of expected value, and compute the expected value of a game. The final.
Unwisdom 3, 10 The law of the unconscious statistician applies also to a measurable function g of several random variables X 1 , Given this information, the calculation is straightforward:. What is the probability of getting a sum less than 3? The expected value is a key aspect of how one characterizes a probability distribution ; it is one type of location parameter. Embed code Affiliate embed. Follow Us Facebook Twitter Pinterest. In this example, we see that, in the long run, we will average a total of 1. One natural question to ask about a probability distribution is, "What is its center? This formula can also easily be adjusted for the continuous case. More specifically, X will be the number of pips showing on the top face of the die after the toss. Random Variable Sensitivity Analysis Shadowing Rolling Returns Roll Back Negative Correlation Scenario Analysis Correlation Coefficient Tax Roll. In this case, the values are headed towards 2, so that is your EV. What is the 'Expected Value' The expected value EV is an anticipated value for a given investment. Variance for a Discrete Random Variable. You might want to save your money! Calculating expected value and variance of a probability density function. In particular, Huygens writes: