Chapter 20 - Chapter 20 Expected Values Motivation Do you...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 20 Expected Values
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Motivation Do you think the following probabilities are correct for payout on a 1$ lottery ticket? Why/Why not? Money you win: 0$ 1$ 5$ 100$ Probability win: .8 .1 .05 .05 Suppose that you buy 1000 of the 1$ lottery tickets w/ payouts above. How much money do you think you’ll make per ticket (on average). i.e. in the long run.
Background image of page 2
Outline Expected Values Law of Large Numbers Thinking About Expected Values: Inference and Variability Finding Expected Values via Simulation
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Expected Values
Background image of page 4
Definition Recall: A random variable is used to represent a set of possible outcomes of a random phenomenon numerically. Ex. If we flip a coin 5 times. The random variable X is could be the number of heads. What are possible values of the random variable? Ex. Suppose we count the number of children a couple has until they have a girl. What is the random variable? What are possible values it can take on?
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Random variable/phenomenon Random phenomenon Don’t know what will happen one time Do know what tends to happen in the long run Random Variable assigns outcomes or events of an experiment a number. Ex. X = number of heads in 2 coin flips What do you think the average outcome will be in terms of the random variable?
Background image of page 6
Definition The expected value of a random variable is defined as the average long run value of the random variable. Ex. Flip a coin twice.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 23

Chapter 20 - Chapter 20 Expected Values Motivation Do you...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online