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Chapter 12
Probabilities and expected values
An expected value summarises all the different possible outcomes by calculating a
single weighted average. It is the long run average (Mean).
The expected value is not the most likely result. It may not even be a possible result,
but instead it finds the long run weighted average outcome if the same event was to
take place thousands of times.
EV = ∑ p x
Where x = future outcome and p = probability of outcome occurring.
Illustrations and further practice
Now try example 1 ‘Expected Values’ from Chapter 12.
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