Problem 7 of 7
Compute expected value for decision win $100 with probability 1/4 and lose $10 with probability 3/4.
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multiply outcomes by probabilities and sum.
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Multiply outcomes by probabilities and sum gains, losses, and costs.
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Your answer is equivalent to the expected form.
Solution
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1. List each outcome and probability.
2. Multiply each outcome by its probability.
3. Sum products and interpret the long-run average.
Use the worked steps, then substitute the final answer back into the original relationship to confirm it satisfies the prompt.
Averaging outcomes without probability weights.