If you have a 50-50 chance of winning $100 or losing $100,your expected value of this gamble is

Question

Quizplus · Accepted Answer

The expected value for this gamble is calculated as follows:

(Expected Value) = (Probability of Winning) x (Amount Won) + (Probability of Losing) x (Amount Lost) 
Expected Value = (0.5) x ($100) + (0.5) x (-$100) 
Expected Value = $50 - $50 
Expected Value = $0

Therefore, the expected value of this gamble is $0. This means that over the long run, you can expect to neither win nor lose money. As a result, the best choice is not to take the gamble.

If You Have a 50-50 Chance of Winning $100 or Losing