SOLUTION: Supposed a certain game is fair and costs $8 if you lose and has a net payoff of $4 if you win. The only possible outcomes of the game are winning and losing.
What is the probab
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-> SOLUTION: Supposed a certain game is fair and costs $8 if you lose and has a net payoff of $4 if you win. The only possible outcomes of the game are winning and losing.
What is the probab
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Question 1110074: Supposed a certain game is fair and costs $8 if you lose and has a net payoff of $4 if you win. The only possible outcomes of the game are winning and losing.
What is the probability of winning? Answer by greenestamps(13200) (Show Source):
A fair game means you break even after several games. Just looking at the numbers, it takes 2 wins at $4 each to balance 1 loss at -$8. So you need to win 2 out of every 3 games to break even. That makes the probability of winning 2/3.
Formally, you want the expected value of a game to be 0. If the probability of winning is x, then the probability of losing is (1-x); for the expected value to be 0, we need to have
