Question
Which of the following statements are true? Mark all that apply.
If the Expected Value of a game is 1 , we say that it is a ‘fair game’
Expected Value is the average gain or loss of an event if the procedure is repeated many times.
The probability of an event that is certain is 1 .
Expected Value is the actual gain or loss each time an event takes place.
If
The probability of an impossible event is 0 .
The probability of an event
Question Help:
If the Expected Value of a game is 1 , we say that it is a ‘fair game’
Expected Value is the average gain or loss of an event if the procedure is repeated many times.
The probability of an event that is certain is 1 .
Expected Value is the actual gain or loss each time an event takes place.
If
The probability of an impossible event is 0 .
The probability of an event
Question Help:
Ask by Hamilton Guzman. in the United States
Mar 26,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
The true statements are:
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- Expected Value is the average gain or loss over many trials.
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- A certain event has a probability of 1.
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- An impossible event has a probability of 0.
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- The probability of an event cannot be negative.
False statements are 1, 4, and 5.
Solution
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Bonus Knowledge
Did you know that the concept of Expected Value has roots dating back to the 17th century? It was developed as part of the mathematical foundation of probability theory, with mathematicians like Blaise Pascal and Pierre de Fermat leading the charge. This powerful concept quickly became an indispensable tool for gamblers, insurance companies, and economists, allowing them to make informed decisions based on potential outcomes!
In real-world applications, Expected Value helps people navigate risk and reward. For instance, when investing in stocks, understanding the Expected Value can help you assess whether a stock purchase is worth it based on its potential gains or losses. Similarly, game designers use it to create balanced games by ensuring that the Expected Value for players remains enticing enough to keep them engaged while also protecting their bottom line.
