1. Expected Value

2. Objectives Determine the expected value of an event.

3. Vocabulary expected value decision theory

4. Of all workers at a certain factory, the proportions earning certain hourly wages are as follows: Find the expected hourly wage that a worker at this factory makes. hourly wage $8.50$9.00$9.50$10.00$12.50$15.00 proportion20%15%25%20%15%5%

5. Suppose you are taking a multiple-choice test where each questions has choices a through e. If you get the answer correct, you get 4 points. If you get a wrong answer, you lose 1 point. Find the expected value of a random guess.

6. Suppose you are taking a multiple-choice test where each questions has choices a through e. If you get the answer correct, you get 4 points. If you get a wrong answer, you lose 1 point. Find the expected value of eliminating one answer and guessing among the remaining 4 possible answers.

7. Suppose you are taking a multiple-choice test where each questions has choices a through e. If you get the answer correct, you get 4 points. If you get a wrong answer, you lose 1 point. Find the expected value of eliminating two answers and guessing among the remaining 3 possible answers.

8. Suppose you are taking a multiple-choice test where each questions has choices a through e. If you get the answer correct, you get 4 points. If you get a wrong answer, you lose 1 point. Use decision theory and your previous answers to create a guessing strategy for this multiple-choice test.