The term expected value is defined as:
A)the value of the outcome with the highest probability.
B)the mid-point of the extreme (high and low)possible values.
C)the value of the outcome with the lowest probability.
D)the sum of the products of the probabilities of all outcomes and their values.
E)the equally-weighted average of all outcomes.

Question

Quizplus · Accepted Answer

The expected value is calculated by multiplying each possible outcome by its probability of occurrence, then summing the products. This calculation provides an estimate of the average value that could be expected from a random event over the long term.

The Term Expected Value Is Defined As