A Survey of Mathematics Related Topics: Pg. 598, Example 1

This applet allows the user to experience the math that occurs in the stock market. The user can assign each player a probability to win and a payoff value. Using these two numbers along with the chosen total number of games, they can try to predict the total payoff and the average payoff per game. The user's predicted average payoff is called the theoretical expected value. When the applet generates this value it is now an experimental expected value.

We apply expected values more than we realize. Everyday, people make decisions based on what they believe will happen. Many people choose not to speed because they believe that the risk of receiving a ticket surpasses the benefit of arriving at their destination early. This particular example may not involve math but calculating expected values are important in many areas of life. For example, businesses use this type of math when they are considering different business ventures. If the expected value is not good, then the business will not make the investment.