Suppose you have a weighted coin in which heads comes up with probability 3/4 and tails with probability 1/4. If you flip heads, you win 2 dollars, but if you flip tails, you lose 1 dollar. What is the expected win of a coin flip in dollars?
Expected value =
Probability of Winning * Amt Won - Probability of Losing * Amt Lost =
(3/4) ($ 2) - (1/4) ($1) =
1.50 - .25 =