Question

In the casino game roulette players bet on which of 38 equally likely outcomes will occur on a single spin of the wheel. The probability of the ball landing on black is 18/38. If you bet $100 on black, which of the following is the best choice for your expected value?

a)-$5.26
b)+$5.26
c)+$52.63
d)-$52.63
e)0.00

Answer is a) -$5.26, just not sure how to achieve that. I know it's asking to find the mean (mu).

Answer 1

we know that
P(winning) = 18/38
P(losing) = 1-18/38 = 20/38
Expected value = 100*18/38 - 100*20/38
1800/38 - 2000/38 = - 200/38 =-$5.26

the answer is the option a)-$5.26