Section 13 4
This presentation is the property of its rightful owner.
Sponsored Links
1 / 20

Section 13.4 PowerPoint PPT Presentation


  • 76 Views
  • Uploaded on
  • Presentation posted in: General

Section 13.4. Expected Value. Objectives. Compute expected value. Use expected value to solve applied problems. Use expected value to determine the average payoff or loss in a game of chance. Key Terms.

Download Presentation

Section 13.4

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Section 13 4

Section 13.4

Expected Value


Objectives

Objectives

  • Compute expected value.

  • Use expected value to solve applied problems.

  • Use expected value to determine the average payoff or loss in a game of chance.


Key terms

Key Terms

  • Expected Value: a mathematical way to use probabilities to determine what to expect in various situation over the long run.

    • Used to determine premiums on insurance policies, weigh the risks versus the benefits of alternatives in business ventures, and indicate to a player of any game of chance what will happen if the game is played repeatedly.


Expected value

Expected Value:

  • The standard way to find expected value is to multiply each possible outcome by its probability, and then add these products.

    • We will use EVto represent expected value.


Key concept

Key Concept:

  • Determining if a game is fair:

    • If a game has an expected value of 0, then the game is called fair.

      • A game in which the expected value is not 0 is an unfair game.


Example 1 calculating expected value

Example 1:Calculating Expected Value

  • TB pg. 762/1


Example 2 calculating expected value

Example 2:Calculating Expected Value

  • TB pg.763/3


Example 3 calculating expected value

Example 3:Calculating Expected Value

  • TB pg.763/5


Example 4 calculating expected value

Example 4:Calculating Expected Value

  • TB pg.763/7


Example 5 calculate price to make game fair

Example 5:Calculate Price to Make Game Fair

  • TB pg.763/9


Example 6 calculate price to make game fair

Example 6:Calculate Price to Make Game Fair

  • TB pg.763/11


Example 7 calculations

Example 7:Calculations

  • TB pg.763/13

    • 1st Calculate EV, Determine Fair, Determine Fair Price


Example 8 calculations

Example 8:Calculations

  • TB pg.763/15

    • 1st Calculate EV, Determine Fair, Determine Fair Price


Example 9 roulette wheel

Example 9:Roulette Wheel

  • TB pg.763/17

    • Calculate EV


Example 10 standardized test

Example 10:Standardized Test

  • TB pg.763/21

    • Guessing


Example 11 standardized test

Example 11:Standardized Test

  • TB pg.764/23

    • Guessing


Example 12 life insurance

Example 12:Life Insurance

  • TB pg.764/25

    • Calculate EV


Example 13 expected gain loss

Example 13:Expected Gain/Loss

  • TB pg.764/29

    • Calculate Gain/Loss


Example 14 expected weekly profit

Example 14:Expected Weekly Profit

  • TB pg.764/31

    • Calculate Profit


Section 13 4 assignment

Section 13.4 Assignment

  • Class work:

    • TB pg. 763/2 – 32 Even

      • Remember you must write problems and show ALL work to receive credit for this assignment.

        • Class assignments are 40% of your grade.

          • This assignment is due Friday, 12/02/11.


  • Login