Question 62762: A certain game involves tossing 3 fair coins. It pays 29 cents for 3 heads, 12 cents for 2 heads, and 5 cents for 1 head. What is a fair price to pay to play this game?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! A certain game involves tossing 3 fair coins. It pays 29 cents for 3 heads, 12 cents for 2 heads, and 5 cents for 1 head. What is a fair price to pay to play this game?
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Prob of getting 3 heads = (1/2)^3=1/8
Prob of getting 2 heads = 3/8
Prob of getting 1 head = 3/8
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Expected earnings = (1/8)(29 cents)+(3/8)(12 cents)+(3/8)(5 cents)
=(29+36+15)/8 cents
=80/8=
=10 cents
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A fair price to play the game would be 10 cents that is
your expected winnings.
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Cheers,
Stan H.
Cheers,
Stan H.
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