Raymond B. answered 12/17/20
Math, microeconomics or criminal justice
E[X] = .7 is the weighted average of the sum of each probability times the outcome
E[X] = .7 = Pr(X=1)(1) + Pr(X=-1)(-1) + Pr(X=2)(2 = .7 - Pr(x=-1) + 2Pr(x=2)
.7 = .7 - Pr(x=-1) + 2Pr(x=2)
Pr(x=-1) = 2Pr(x=2)
Pr(x=1) + Pr(x=-1) + Pr(x=2) = 1. The probabilities sum to one.
.7 = 1- Pr(x=-1) - Pr(x=2)
Pr(x=-1) + Pr(x=2) = 1-.7 = .3
Pr(x=-1) -2Pr(x=2) = 0
subtract those last 2 equations to get
3Pr(x=2) = .3
divide by 3
Pr(x=2) = .1
Pr(x=-1) = .2
Pr(x=1) = .7
those 3 probabilities sum to one
Pr(x=2) = .1