Question 295755: Mike and Dave play the following game. Mike picks from the deck of cards. If he draws a heart, Dave gives him $5. If not he gives Dave $2.
A. Determine mikes expectation
B. Determine Daves expectation
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Mike and Dave play the following game. Mike picks from the deck of cards. If he draws a heart, Dave gives him $5. If not he gives Dave $2.
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Mikes random number gain: 5, -2
A. Determine mikes expectation
M[E(x)] = (1/4)5 + (3/4)-2 = 5/4-6/4 = -1/4 or -$0.25
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B. Determine Daves expectation
Daves random number gain: 2 , -5
D[E(x)] = (3/4)2 + (1/4)(-5) = 6/4 -5/4 = +$0.25
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Cheers,
Stan H.
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