Expected Value Calculator
Calculate the expected value of bets, investments, and random events
Calculator Type
Outcome 1
Outcome 2
Total probability: 1.000
Expected Value Results
Expected Value
$0.00
Per trial
Variance
0.00
Std Dev: $0.00
Interpretation
This bet/investment has a negative expected value, meaning you can expect to lose money over time.
Understanding Expected Value
What is Expected Value?
Expected value (EV) is the average outcome of a random event if it were repeated many times. It's calculated by multiplying each possible outcome by its probability and summing the results.
EV = Σ (Probability × Value)Positive EV (+EV)
- • Mathematically profitable
- • Gain money over time
- • Good investment/bet
- • Seek these opportunities
Negative EV (-EV)
- • Mathematically unprofitable
- • Lose money over time
- • Bad investment/bet
- • Avoid these situations
Real-World Applications
• Insurance: Companies use EV to set premiums
• Investing: Portfolio expected returns
• Gambling: All casino games have negative EV for players
• Business: Project ROI calculations