Why expected value is optimal?

1. Why Is expected value useful?
2. Is the expected value the most probable?
3. What is the use of expected value in decision making?
4. Why expected value is mean?

Why Is expected value useful?

An expected value gives a quick insight into the behavior of a random variable without knowing if it is discrete or continuous. Therefore, two random variables with the same expected value can have different probability distributions.

Is the expected value the most probable?

It can be thought of as an average of all the possible outcomes of a measurement as weighted by their likelihood, and as such it is not the most probable value of a measurement; indeed the expectation value may have zero probability of occurring (e.g. measurements which can only yield integer values may have a non- ...

What is the use of expected value in decision making?

Expected value is the average expected financial outcome of a decision. You can get it by multiplying all of the possible payoffs by the probability each of them will happen and summing your answers.

Why expected value is mean?

The mean is often called the "expected value" or the "expectation value". You expect this value because the probability of getting "heads" is 0.5 and if you toss 10 times you should get 5. To formalize this particular example of the mean, if p is the probability and n the number of events, then the mean is a = np.