This module is part of the 2027 curriculum. You are following the 2026 curriculum, where it is not taught in this form. Switch if you are sitting the exam under the 2027 curriculum.
Lesson 2 of 12 · 14 min
Expected value, variance and standard deviation
Expected value is your probability-weighted forecast; variance and standard deviation measure how far the actual outcome is likely to land from that forecast.
In short
- The expected value multiplies each possible outcome by its probability and adds the products.
- It is a forward-looking forecast (or the true population mean), unlike a sample mean, which equally weights past observations.
- Variance is the probability-weighted average of squared deviations from . It is never negative and is zero only when the outcome is certain.
- Standard deviation is the positive square root of variance and is in the same units as the variable, so it is easier to interpret.
- Always work in the same order: expected value, then variance, then standard deviation.
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