SOLUTION: assume that a person spins the pointer and is awarded the amount indicated by the pointer.If it cost $2.00 to play the game. A)Determine the expectations of a person who plays the

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Question 731998: assume that a person spins the pointer and is awarded the amount indicated by the pointer.If it cost $2.00 to play the game. A)Determine the expectations of a person who plays the game. B)the fair price to play the game.
The spinner has 1/2$10 1/4$1 1/4$5
Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
assume that a person spins the pointer and is awarded the amount indicated by the pointer.If it cost $2.00 to play the game. A)Determine the expectations of a person who plays the game. B)the fair price to play the game.
The spinner has 1/2$10 1/4$1 1/4$5
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Expected winnings: (1/2)*8 + (1/4)(-1) + (1/4)3
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= 4 - 1/4 + 3/4
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= $3.50 (Can expect to win $3.50 each time the game is played)
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Fair price = cost + expected value = 2+3.50 = $5.50
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Cheers,
Stan H.