Expected Value Worksheet

Expected Value Worksheet

Read each question carefully and calculate the expected value. Show all your work.

1. A game involves rolling a standard six-sided die. If you roll a 6, you win $10. If you roll a 1 or 2, you lose $5. If you roll a 3, 4, or 5, you win nothing. What is the expected value of playing this game?

2. In a raffle, 200 tickets are sold at $2 each. There is one grand prize of $100 and two second prizes of $25 each. What is the expected value of a single ticket?

3. Expected value is calculated by multiplying each possible   by its probability and then   the results.

4. If the expected value of a game is negative, it means that, on average, a player can expect to   money over time.

5. A company is considering investing in a new project. There is a 60% chance of making a profit of $50,000, a 30% chance of breaking even ($0 profit), and a 10% chance of losing $20,000. Calculate the expected profit from this project.

6. A positive expected value always guarantees a win in a single trial.