Scribd
Upload
170 views3 pages

Expected Value Example-Rolling Dice

To calculate an expected value: 1. Familiarize yourself with the possible outcomes and their probabilities in a given situation. For example, the outcomes of rolling a 6-sided die. 2. Enumerate all possible outcomes. For a die roll, the outcomes are rolling 1-6. 3. Determine the probability of each outcome. For a fair die, each number has a 1/6 probability of being rolled. 4. Calculate expected value by multiplying each outcome by its probability and summing the results. For a die roll, the expected value is 3.5.

Uploaded by

pazrie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
170 views3 pages

Expected Value Example-Rolling Dice

To calculate an expected value: 1. Familiarize yourself with the possible outcomes and their probabilities in a given situation. For example, the outcomes of rolling a 6-sided die. 2. Enumerate all possible outcomes. For a die roll, the outcomes are rolling 1-6. 3. Determine the probability of each outcome. For a fair die, each number has a 1/6 probability of being rolled. 4. Calculate expected value by multiplying each outcome by its probability and summing the results. For a die roll, the expected value is 3.5.

Uploaded by

pazrie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

11/13/13

How to Calculate an Expected Value: 5 Steps (with Pictures)

How to Calculate an Expected Value


Expected value is a concept employed in statistical analysis. It is a weighted
average approach that involves multiplying each possible outcome in a situation
with its probability to arrive at the expected outcome. The expected value
functions as an average, and can often be an impossible outcome in itself; for
example, the expected value of a 6-sided die roll is 3.5. To calculate an
expected value, you need to gain an understanding of each outcome in a
situation and its probability.
English Language Editing
Webshop.Elsevier.com/EnglishEditors
Get noticed for the right reasons with a perfectly-worded manuscript

Steps

Familiarize yourself with the situation at hand. Before enumerating the possible
outcomes and probabilities, make sure to have an overall grasp of the situation in

which an outcome is generated. For example, consider a die-rolling game that costs $10
per play. A 6-sided die is rolled once, and your cash winnings depend on the number rolled.
Rolling a 6 wins you $30; rolling a 5 wins you $20; rolling any other number results in no
payout.

Sunway International Sch


www.sis.sunway.edu.my
Canadian Certified Teachers, Grade 7 to Grade 11. Join Now!

www.wikihow.com/Calculate-an-Expected-Value

1/5

11/13/13

How to Calculate an Expected Value: 5 Steps (with Pictures)

Enumerate all of the possible outcomes. It helps to make a list of all the possible
outcomes in the given situation. In the example above, there are 6 possible outcomes.

They are: (1) roll a 1 and lose $10, (2) roll a 2 and lose $10, (3) roll a 3 and lose $10, (4) roll
a 4 and lose $10, (5) roll a 5 and win $10, and (6) roll a 6 and win $20. Note that the $10
entrance fee is subtracted from each outcome to arrive at the net outcome.

Determine the probability of each outcome. In this case, the probability of each of
the 6 outcomes is the same. When rolling a 6-sided die, the chance of a particular

number being rolled is 1 in 6, or 16.7 percent. It is useful to list these probabilities next to
their outcomes, especially in cases more complicated than a simple die roll.

www.wikihow.com/Calculate-an-Expected-Value

2/5

11/13/13

How to Calculate an Expected Value: 5 Steps (with Pictures)

Calculate the expected value. The expected value is calculated using the outcomes
and their probabilities. The formula is as follows: O1*P1 + O2*P2 + O3*P3, etcetera.

The "O" terms represent the different outcomes, and the "P" terms represent the probability
of those outcomes.
Continuing with the example above, the expected value of the dice game is: (-10 *
.167) + (-10 * .167) + (-10 * .167) + (-10 * .167) + (10 * .167) + (20 * .167), or $1.67. Therefore, when playing the dice game, you should expect to lose $1.67 per
game.

Understand the implications of the expected value calculation. In the example


above, it was determined that the expected winnings of the game were - $1.67 per

roll. This, of course, is an impossible outcome in itself; you can only either lose $10, win
$10, or win $20. However, the expected value is useful as a long-term average figure. If you
play this dice game over and over, you will lose somewhere near $1.67 per game on
average. Therefore, this game is not particularly favorable to the player.
The more times the situation is repeated, the more accurately the expected value
will mirror the actual average outcome. For example, you might play the game
above 5 times in a row and lose every time, resulting in an average loss of $10.
www.wikihow.com/Calculate-an-Expected-Value

3/5

You might also like