Question

Question 7 of 12, Step 1 of 2

6/19
Correct
If you throw exactly one head in two tosses of a coin you win $9. If not, you pay me $15.
Step 1 of 2: Find the expected value of the proposition. Round your answer to two decimal places. Losses must be expressed as negative values.
Answer

Answer 1

Explanation:

the expected value is calculated by multiplying each of the possible outcomes by their probability, and then summing up all these results.

tossing a coin 2 times gives us 4 possible different outcomes (all with the same probability of 0.25) :

head - tail

head - head

tail - head

tail - tail

to have exactly one head is 2 out of these 4 possible outcomes, and the probability is 0.5.

everything else is also 2 out of these 4 possible outcomes, and the probability for that is therefore 0.5 too.

the expected value (from your point of view) is

9×0.5 - 15×0.5 = -$3.00