SOLUTION: Suppose you pay $2.00 to roll a fair die with the understanding that you will get back $4.00 for rolling a 4 or a 5, nothing otherwise. What is your expected value?
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Question 546191: Suppose you pay $2.00 to roll a fair die with the understanding that you will get back $4.00 for rolling a 4 or a 5, nothing otherwise. What is your expected value? Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! Suppose you pay $2.00 to roll a fair die with the understanding that you will get back $4.00 for rolling a 4 or a 5, nothing otherwise. What is your expected value?
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Random "winning" values:::::::::::2::::::::-2
Corresponding probabilities:::::::2/6::::::4/6
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E(x) = (1/3)2 + (2/3)(-2) = (2-4)/3 = -2/3 = -$0.66
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You can expect to lose 66 cents each time you play.
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Cheers,
Stan H.
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