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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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