General Mathematic HSC Financial Expectation Stage 6 Year

General Mathematic (HSC) Financial Expectation Stage 6 - Year 12 Press Ctrl-A ©G Dear 2010 – Not to be sold/Free to use 1

Financial Expectations is the average financial return from a chance situation. It tells us if we can expect a gain or a loss over a long period of time. Click Here Example In a coin tossing game you win $1 for a head and lose $1 for a tail. P(H) = 1 P(T) = 1 2 2 F. E. = 1 x $1 + 1 x -$1 = $0 2 2 No Gain or Loss per game 2

Tossing a Coin Experiment H T 9 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0 Click Here Do Not Delete 3

Free on web: http: //www. casinohots. com/Roulette. swf Financial Expectations [Right-Click Mouse -> Select Play] If necessary. 4

Financial Expectations Example: Bet on the Red In a roulette game you win $1 for a red and lose $1 for a black and lose $1 for a green. P(R) = 18 37 P(B) = 18 37 P(G) = 1 37 18 F. E. = x $1 + 18 x -$1 + 1 x -$1 = -$0. 03 37 37 37 Red Black Green Net Loss of 3 cents per game.

Two-Up - Tossing a Coin Experiment HH HT TT 9 1 2 3 4 5 6 7 8 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0 Click Here 6

Financial Expectations Example: Bet on the Head In a two-up game you win $1 for a HH and loose $1 for a TT and loose $1 for a HT. P(HH) = 1 4 P(TT) = 1 4 P(HT) = 1 2 1 F. E. = x $1 + 1 x -$1 = -$0. 50 4 4 2 HH TT HT Net Loss of 50 cents per game.