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Math Help - Expected Value

  1. #1
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    Expected Value

    I've just finished my maths A-Level (I'm British) and one of the topics we covered was the Expected Value of a random variable. I was wondering if this was applicable to sports betting. For example:

    Odds my sports team will win are 4:1 against.

    Probability will win: 1/5, return of a 1 bet is 5

    Probability will lose: 4/5, return of a 1 bet is -1

    Expected value is: 0.2

    Is this approch applicable?
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  2. #2
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    Quote Originally Posted by Killswitch View Post
    I've just finished my maths A-Level (I'm British) and one of the topics we covered was the Expected Value of a random variable. I was wondering if this was applicable to sports betting. For example:

    Odds my sports team will win are 4:1 against.

    Probability will win: 1/5, return of a 1 bet is 5

    Probability will lose: 4/5, return of a 1 bet is -1

    Expected value is: 0.2

    Is this approch applicable?
    The expected value is 0. When you win, the return is -1 + (1+4) = 4. That is, you first give them 1, then they return the 1 plus 4 more.
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  3. #3
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    Ah, you're right about that, my original question stills stands - can you apply expected values to sports betting?
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  4. #4
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    Quote Originally Posted by Killswitch View Post
    Ah, you're right about that, my original question stills stands - can you apply expected values to sports betting?
    Yes, the outcome of a wager is a random variable which is bounded and which therefore has an expected value.
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