Los 4.a

Question 1

What is the expected value and how do you work it out?

Answer 1

Expected value of a random variable is the weighted average of the possible outcomes for the variable.
Calculation: (Prob1 * value1) + (Prob2* Value2) …

Question 2

How does it relate with variance and what’s the calculation

Answer 2

Variance can be calculated as the probalitiy weighted sum of the squared deviation from the mean.
Calculation :
1. Calculate the Expected Value: The expected value,, represents the average outcome you would expect if the event were repeated many times. It’s calculated as the sum of each possible outcome multiplied by its probability:
2. Calculate the Deviation from the Mean: For each possible outcome, calculate how much it deviates from the expected value:
3. Square the Deviations: Square each of the deviations calculated in the previous step. This eliminates negative values and emphasizes larger deviations:
4. Calculate the Weighted Average of Squared Deviations (Variance): Multiply each squared deviation by the probability of its corresponding outcome. Sum these products to get the variance.
5. Calculate the Standard Deviation: Finally, take the square root of the variance to get the standard deviation.