Two independent events

Given the probabilities of two independent events, students calculate the probability of both events happening, or of one or the other happening.

• The probability of both Event A and Event B = (probability of Event A) x (probability of Event B)
• The probability of either Event A or Event B = (probability of Event A) + (probability of Event B)

Expected value

Students calculate the expected value of an event in order to assess risk.

• Expected value = sum of all different outcomes
• [(probability of Event A) x (payoff for Event A)] + [(probability of Event B) x (payoff for Event B)]
  

Question

If you are offered the chance to play a game in which you roll a die, and you receive the dollar value of the roll: $1 for a one, $2 for a two, etc.  It costs $3 to play.  Is it worth the risk?  Answer!