Question 309161: Suppose you play a game where you flip a coin. If is heads, you lose $1.00. If it is a tail, a die is rolled. If it is an even number, you win $ 2.00. If it is an odd number, you lose $3.00. Find the expected value
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Suppose you play a game where you flip a coin. If is heads, you lose $1.00. If it is a tail, a die is rolled. If it is an even number, you win $ 2.00. If it is an odd number, you lose $3.00. Find the expected value
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Random "gain" values: -1, 2, -3
Corresponding probabilites: 1/2 , (1/2)(1/2)= 1/4 , (1/2)(1/2) = 1/4
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E(X) = (1/2)(-2) + (1/4)(2) + (1/4)(-3)
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= [-2 + 2 -3]/4
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= -3/4
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= -$.75
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Cheers,
Stan H.
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