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

Algebra ->  Probability-and-statistics -> 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      Log On


   

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(52897) About Me  (Show Source):
You can put this solution on YOUR website!
.

Where are 2 outcomes, 1 and 2, with the probability of   1%2F6 each, and each produces $10 winning.


Where are 4 other possible outcomes 3, 4, 6 and 6, with the same probability of  1%2F6  each.


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

Solved.