The expected value of the outcome of the bid is <u>$1,250</u>.
<h3>What is the expected value?</h3>
The expected value is the sum of the values of a random variable with each value multiplied by its probability of occurrence.
In this example, the probability is calculated as 0.625% because before the bid is won, the bidder must have staked $160 or 160 times $1 each.
<h3>Data and Calculations:</h3>
Bid charges per bid = $1
The average bid charge for winning = $160
Probability of winning the bid = 0.625% ($1/$160)
The expected value of the bid = <u>$1,250</u> (0.625% x $2,000)
Thus, the expected value of the outcome of the bid is <u>$1,250</u>.
Learn more about expected values at brainly.com/question/14723169
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