SOLUTION: Kindly assist. A game of chance consist of tossing 3 coins one . For every head that shows up one gain $ 300 and $ losses $ 200 for each tail that appears . a) Determine th

Question 63779: Kindly assist.
A game of chance consist of tossing 3 coins one . For every head that shows up one gain $ 300 and $ losses $ 200 for each tail that appears .
a) Determine the expected value of the game
b) Dtermin the Standard deviation of the game
c) It is prudent for one to play the game ?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A game of chance consist of tossing 3 coins one . For every head that shows up one gain $ 300 and $ losses $ 200 for each tail that appears .
a) Determine the expected value of the game
b) Dtermin the Standard deviation of the game
c) It is prudent for one to play the game ?
-----------------
a)List the possible tossing results:
HHH,HHT,HTH,HHT,HTT,THT,TTH,TTT
Each has probability 1/8
List the corresponding "pay" value of each:
900,400,400,400,-100,-100,-100,-600
Multiply each "pay" value by its corresponding probability
then add the result to get the expected value:
Expected Value = 1200/8=$150
b)I'll have to get back to this
c)Yes it's prudent since the expected win is $150
Cheers,
Stan H.
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