1. What is Expected Value?

Expected Value (EV) is a concept in probability that calculates the average outcome when an experiment (or bet) is repeated multiple times. It helps determine whether a bet or decision is favorable in the long run.

2. How Does the Calculator Work?

The calculator uses the Expected Value formula:

Where:

• \( Probability_{win} \) — Chance of winning (0 to 1)
• \( Win_{amount} \) — Potential winnings
• \( Probability_{loss} \) — Chance of losing (0 to 1)
• \( Loss_{amount} \) — Potential loss

Explanation: The formula calculates the average amount one can expect to win or lose per bet if the bet is repeated many times.

3. Importance of Expected Value Calculation

Details: EV helps in making rational decisions in gambling, investing, and risk assessment. A positive EV indicates a favorable bet in the long run, while negative EV suggests an unfavorable one.

4. Using the Calculator

Tips: Enter probabilities as decimals between 0 and 1. The sum of win and loss probabilities should not exceed 1. Enter monetary values in your preferred currency.

5. Frequently Asked Questions (FAQ)

Q1: What does a positive EV mean?
A: A positive EV means the bet is favorable in the long run and should theoretically make money over time.

Q2: What does a negative EV mean?
A: A negative EV means the bet is unfavorable and would lose money over time.

Q3: How accurate is EV calculation?
A: EV is theoretically accurate over infinite trials. In practice, variance plays a significant role in short-term outcomes.

Q4: Can EV be used for all types of bets?
A: EV works best for bets with quantifiable probabilities and outcomes. It's less useful for complex, multi-outcome scenarios.

Q5: Should I always take positive EV bets?
A: While positive EV is generally good, consider your bankroll, risk tolerance, and the variance of outcomes before placing bets.