Discrete Expected Value Calculator





Formula

The formula to calculate the expected value for a set of discrete outcomes is:

\[ E = \sum (P_i \times X_i) \]

Where:

What is a Discrete Expected Value?

The expected value, also known as the mean or average, is a measure of the center of a probability distribution. For a set of discrete outcomes, the expected value is calculated by multiplying each outcome by its probability and summing these products. This gives a weighted average that reflects the likelihood of each outcome occurring. The expected value is a fundamental concept in probability and statistics, used in various fields such as finance, economics, and decision theory.

Example Calculation

Let's assume the following values:

Step 1: Multiply each outcome by its probability:

\[ 1 \times 0.2 = 0.2 \]

\[ 2 \times 0.5 = 1 \]

\[ 3 \times 0.3 = 0.9 \]

Step 2: Sum all the products:

\[ 0.2 + 1 + 0.9 = 2.1 \]

The Expected Value (E) is 2.1.