The proper question is:
In a carnival game you can either throw a Target A which yields a $7 prize 12% of the time Target B which yields a $3 prize 48% of the time. find the expected value of Target A
Solution:
We have to find the Expected Value for the Target A.
The expected value of an event is obtained by multiplying all the probabilities with their respective prizes and then adding up those results. In this case for target A, we are given that the $7 prize can be obtained with a 12% probability.
so, the expected value for Target A will be:
Expected Value = Probability x Prize Value
Expected Value = 12% x 7
Expected Value = 0.12 x 7 = $ 0.84
Thus, the expected value from Target A is $0.84. This means if the game is played a large number of times, the player is expected to win $ 0.84 per game.