LAC 28:CXLII.3909. Using Probability to Make Decisions

A. Calculate expected values and use them to solve problems. 1. Define a random variable for a quantity of interest by assigning a numerical value to each event in a sample space; graph the corresponding probability distribution using the same graphical displays as for data distributions. 2. Calculate the expected value of a random variable; interpret it as the mean of the probability distribution. 3. Develop a probability distribution for a random variable defined for a sample space in which theoretical probabilities can be calculated; find the expected value. 4. Develop a probability distribution for a random variable defined for a sample space in which probabilities are assigned empirically; find the expected value. B. Use probability to evaluate outcomes of decisions. 1. Weigh the possible outcomes of a decision by assigning probabilities to payoff values and finding expected values. a. Find the expected payoff of a game of change. b. Evaluate and compare strategies on the basis of expected values. 2. Use probabilities to make fair decisions. 3. Analyze decisions and strategies using probability concepts.