# Calculate the expected value

Anticipated value for a given investment. In statistics and probability analysis, expected value is calculated by multiplying each of the possible outcomes by the. In probability theory, the expected value of a random variable, intuitively, is the long-run .. This is because an expected value calculation must not depend on the order in which the possible outcomes are presented, whereas in a conditionally. Definition of expected value & calculating by hand and in Excel. Includes video. Find an expected value for a discrete random variable. Add up the values from Step 1: How do I calculate the mean of a group of numbers? See the figure for an illustration of the averages of longer sequences of rolls of the die and how they converge to the expected value of 3. You need to list all possible outcomes, which are: If the outcomes x i are not equally probable, then the simple average must be replaced with the weighted average, which takes into account the fact that some outcomes are more likely than the others. In what follows we will see how to use the formula for expected value. Find an Expected Value by Hand Find an Expected Value in Excel Find an Expected Value for a Discrete Random Variable What is an Expected Value used for in Real Life? Check out the grade-increasing book that's recommended reading at top universities! The probability P of getting a question right if you guess: We now turn to a continuous random variable, which we will denote by X. Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Stock Analysis Stock Simulator FXtrader Exam Prep Quizzer Net Worth Calculator. Welcome to STAT ! Figure out the possible values for X.