Question

You are playing a game where you draw a card from a standard deck, and you will win $13 if you draw a face card, $6 if you draw an ace and lose $3 if you draw any other card. What is the expected gain from this game?

Answer 1

There are 12 face cards and 4 aces in a standard deck, so the probability of drawing a face card is 12/52 = 3/13, the probability of drawing an ace is 4/52 = 1/13, and the probability of drawing any other card is 1 - 3/13 - 1/13 = 9/13.

The expected gain from drawing a face card is $13, from drawing an ace is $6, and from drawing any other card is -$3. Therefore, the expected gain from this game is:

(3/13)($13) + (1/13)($6) + (9/13)(-$3) = $0

This means that over many games, on average, you would neither win nor lose any money playing this game.