Expected gain

The expected gain (or expected return) is the weighted-average most likely outcome in gambling, probability theory, economics or finance.

Discrete scenarios

In gambling and probability theory, there is usually a discrete set of possible outcomes. In this case, expected gain is a measure of the relative balance of win or loss weighted by their chances of occurring.

For example, if a fair die is thrown and numbers 1 and 2 win £1, but 3-6 lose £0.5, then the expected gain per throw is

£1 × 1/3 - £0.5 × 2/3 = £0:

the game is thus fair.

Continuous scenarios

In economics and finance, it is more likely that the set of possible outcomes is continuous (a numerical or currency value between 0 and infinity). In this case, simplifying assumptions are made about the distribution of possible outcomes. Either a continuous probability function is constructed, or a discrete probability distribution is assumed.

Template:Econ-stub

Navigation

  • Art and Cultures
    • Art (https://academickids.com/encyclopedia/index.php/Art)
    • Architecture (https://academickids.com/encyclopedia/index.php/Architecture)
    • Cultures (https://www.academickids.com/encyclopedia/index.php/Cultures)
    • Music (https://www.academickids.com/encyclopedia/index.php/Music)
    • Musical Instruments (http://academickids.com/encyclopedia/index.php/List_of_musical_instruments)
  • Biographies (http://www.academickids.com/encyclopedia/index.php/Biographies)
  • Clipart (http://www.academickids.com/encyclopedia/index.php/Clipart)
  • Geography (http://www.academickids.com/encyclopedia/index.php/Geography)
    • Countries of the World (http://www.academickids.com/encyclopedia/index.php/Countries)
    • Maps (http://www.academickids.com/encyclopedia/index.php/Maps)
    • Flags (http://www.academickids.com/encyclopedia/index.php/Flags)
    • Continents (http://www.academickids.com/encyclopedia/index.php/Continents)
  • History (http://www.academickids.com/encyclopedia/index.php/History)
    • Ancient Civilizations (http://www.academickids.com/encyclopedia/index.php/Ancient_Civilizations)
    • Industrial Revolution (http://www.academickids.com/encyclopedia/index.php/Industrial_Revolution)
    • Middle Ages (http://www.academickids.com/encyclopedia/index.php/Middle_Ages)
    • Prehistory (http://www.academickids.com/encyclopedia/index.php/Prehistory)
    • Renaissance (http://www.academickids.com/encyclopedia/index.php/Renaissance)
    • Timelines (http://www.academickids.com/encyclopedia/index.php/Timelines)
    • United States (http://www.academickids.com/encyclopedia/index.php/United_States)
    • Wars (http://www.academickids.com/encyclopedia/index.php/Wars)
    • World History (http://www.academickids.com/encyclopedia/index.php/History_of_the_world)
  • Human Body (http://www.academickids.com/encyclopedia/index.php/Human_Body)
  • Mathematics (http://www.academickids.com/encyclopedia/index.php/Mathematics)
  • Reference (http://www.academickids.com/encyclopedia/index.php/Reference)
  • Science (http://www.academickids.com/encyclopedia/index.php/Science)
    • Animals (http://www.academickids.com/encyclopedia/index.php/Animals)
    • Aviation (http://www.academickids.com/encyclopedia/index.php/Aviation)
    • Dinosaurs (http://www.academickids.com/encyclopedia/index.php/Dinosaurs)
    • Earth (http://www.academickids.com/encyclopedia/index.php/Earth)
    • Inventions (http://www.academickids.com/encyclopedia/index.php/Inventions)
    • Physical Science (http://www.academickids.com/encyclopedia/index.php/Physical_Science)
    • Plants (http://www.academickids.com/encyclopedia/index.php/Plants)
    • Scientists (http://www.academickids.com/encyclopedia/index.php/Scientists)
  • Social Studies (http://www.academickids.com/encyclopedia/index.php/Social_Studies)
    • Anthropology (http://www.academickids.com/encyclopedia/index.php/Anthropology)
    • Economics (http://www.academickids.com/encyclopedia/index.php/Economics)
    • Government (http://www.academickids.com/encyclopedia/index.php/Government)
    • Religion (http://www.academickids.com/encyclopedia/index.php/Religion)
    • Holidays (http://www.academickids.com/encyclopedia/index.php/Holidays)
  • Space and Astronomy
    • Solar System (http://www.academickids.com/encyclopedia/index.php/Solar_System)
    • Planets (http://www.academickids.com/encyclopedia/index.php/Planets)
  • Sports (http://www.academickids.com/encyclopedia/index.php/Sports)
  • Timelines (http://www.academickids.com/encyclopedia/index.php/Timelines)
  • Weather (http://www.academickids.com/encyclopedia/index.php/Weather)
  • US States (http://www.academickids.com/encyclopedia/index.php/US_States)

Information

  • Home Page (http://academickids.com/encyclopedia/index.php)
  • Contact Us (http://www.academickids.com/encyclopedia/index.php/Contactus)

  • Clip Art (http://classroomclipart.com)
Toolbox
Personal tools