The game of heads up is played by flipping two coins. The game is a fair game
Solution:
Given that , the game of heads up is played by flipping two coins.
If they both land heads up, you win $8.
And If only one lands heads up, you win $14.
And If no coins land heads up, you win $0.
We have to pay $6 to play the game each time the coins are flipped,
Then we have to find is the game a fair game
Now, we say a thing is fair if it is favorable for us.
From players view, to say the game is fair, we have to get money.
Now, if we see
When we pay $6, we will lose it only when no heads are up as we get $0 in that condition.
But we will get 14 – 6 = $8 when one head turns up and 8 – 6 = $2 when both heads are up.
Now, number of outcomes for losses = 1 (tail – tail condition)
Probability =
And number of outcomes for winnings = 3 (head - tail, tail – head and head – head conditions)
Probability =
Clearly we can say that, chances of winnings are more.
Hence, it is an fair game.