Discrete Probability Distributions

Example 1

Of six envelopes, three each hold $1, two each hold $1,000, and one holds $100,000.? You choose one of the envelopes at random and get to keep the contents. Calculate the expected value of the contents and interpret its meaning. What is the expected value if you add $10,000 to each envelope? If you multiply the amount in each envelope by 10?

Solution