SOLUTION: A box contains ten $1 bills, six $5 bills, and four $10 bills. A person is charged $5 to select a bill. What is the expected value? a. -$1 b. $1 c. -$2

Algebra ->  Probability-and-statistics -> SOLUTION: A box contains ten $1 bills, six $5 bills, and four $10 bills. A person is charged $5 to select a bill. What is the expected value? a. -$1 b. $1 c. -$2       Log On


   

Question 106764: A box contains ten $1 bills, six $5 bills, and four $10 bills. A person is charged $5 to select a bill. What is the expected value?
a. -$1
b. $1
c. -$2
d. -$1.50

Answer by scott8148(6628) About Me  (Show Source):
You can put this solution on YOUR website!
20 bills in box so chance of any individual bill is .05

expected return is 10(1)(.05)+6(5)(.05)+4(10)(.05)=80(.05)

but it costs $5 to select, so expected value is "expected return" minus 5