Probabilities: Expected value - University of Pittsburgh
Investing $100 for 6 months Stock 1 Stock 2 Bank 0.6 0.4 110 90 0.4 0.6 140 80 101 1.0 100 1.0 Home 102 66 36 102 0.6 110 0.4 90 56 48 104 0.4 140 0.6 80 104 (up) (down) (up) (down) M. Hauskrecht Selection based on expected values The optimal action is the option that maximizes the expected outcome: Stock 1 Stock 2 Bank 0.6 0.4 110 90 0.4
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