Calculate the expected value of a random variable

What you'll learn

1. Compute the expected value of a discrete random variable using E(X) = sum of x*P(X = x)
2. Interpret expected value as the mean of the probability distribution
3. Interpret expected value as the long-run average value over many repetitions
4. Locate the expected value as the balance point of the probability histogram
5. Compute and interpret expected value for situations with signed payoffs, and classify a game of chance as fair, favorable, or unfavorable from the sign of E(X)

Prerequisites

• Define a random variable and graph its distribution