Question

suppose you believe that the probability that your team will win a game is 1 3 . you are willing to bet $7 that your team will win. what amount (in $) should you be offered if you win in order to have a break-even expected value? $ incorrect: your answer is incorrect.

Answer 1

To break even on a $7 bet with 1/3 probability of winning, the student should be offered $14 if their team wins.

Step-by-step explanation:

To find the amount you should be offered if you win in order to have a break-even expected value, you need to calculate the expected value of the game. The expected value represents the average amount you can expect to win or lose per game. In this case, if you believe the probability of winning is 1/3, the probability of losing is 2/3. So, you would calculate the expected value as follows:

(1/3) * (amount you win) + (2/3) * (-7) = 0

Solving for the amount you win:

(1/3) * (amount you win) = (2/3) * 7

Amount you win = (2/3) * 7 * (3/1) = 14

Therefore, you should be offered $14 if you win in order to have a break-even expected value.