What is the numeric EMV of Option A given a 25% probability of a $45,000 event?

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Multiple Choice

What is the numeric EMV of Option A given a 25% probability of a $45,000 event?

Explanation:
Expect value is the probability-weighted average of outcomes. If an event pays $45,000 with a 25% chance, multiply 0.25 by 45,000 to get 11,250. So the numeric EMV is 11,250. This reflects the average amount you’d expect per trial when considering the chance of the event. The other numbers would come from using different probabilities or payoffs (they aren’t the correct product for the given 25% chance and $45,000 payoff).

Expect value is the probability-weighted average of outcomes. If an event pays $45,000 with a 25% chance, multiply 0.25 by 45,000 to get 11,250. So the numeric EMV is 11,250. This reflects the average amount you’d expect per trial when considering the chance of the event. The other numbers would come from using different probabilities or payoffs (they aren’t the correct product for the given 25% chance and $45,000 payoff).

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