What does the term ''expected value'' mean?

David Troyer

David Troyer

Answered question

2022-01-16

What does the term expected value mean?

Answer & Explanation

lenkiklisg7

lenkiklisg7

Beginner2022-01-16Added 29 answers

Explanation:
For real life data the mean of the frequency distribution is calculated by the formula
x=fxn
for a probability distribution the expected value is the corresponding calculation; the theoretical mean if you like.
For discrete distributions
μ=E(X)=xP(X=x)
for continuous distribution
μ=E(X)=allxxf(x)dx
in both cases since the total probability is 1 we do not need to divide by anything.
esfloravaou

esfloravaou

Beginner2022-01-17Added 43 answers

The expected value (EV) is an anticipated value for an investment at some point in the future. In statistics and probability analysis, the expected value is calculated by multiplying each of the possible outcomes by the likelihood each outcome will occur and then summing all of those values. By calculating expected values, investors can choose the scenario most likely to give the desired outcome.
EV=P(Xi)×Xi

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