SOLUTION: You play a gambling game with a friend in which you win 25% of the time and lose 75% of the time. When you lose, you lose $1. What profit should you earn when you win, in order for

Question 1166089: You play a gambling game with a friend in which you win 25% of the time and lose 75% of the time. When you lose, you lose $1. What profit should you earn when you win, in order for the game to be fair?
Answer by ikleyn(52910) (Show Source): You can put this solution on YOUR website!
.


Where are 2 outcomes, 1 and 2, with the probability of    each, and each produces $10 winning.


Where are 4 other possible outcomes 3, 4, 6 and 6, with the same probability of    each.


In order the game is fair, the uniform loss in each of these 4 outcomes must be $5.    ANSWER

Solved.

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