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CFA Level 1
Quantitative Methods

Expected Value Calculation for a Coin Flip Game

Easy Probability Concepts Expected Value And Variance

Consider a game where you flip a coin. If it comes up heads, you win $10; if it comes up tails, you lose $5. Assume the coin is fair, meaning the probability of heads (win) is 0.5 and the probability of tails (loss) is also 0.5.

Using the concepts of expected value and variance, calculate the expected value of this game.

Hint

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