Question

A person places a bet on a new type of Roulette wheel with the following probabilities and outcomes: 45% probability of RED: Person Wins $100 45% probability of BLACK: Person Loses $100 10% probability of GREEN: Person Loses $10 What is the expected dollar value for a person playing this game

Answer 1

The expected dollar value for a person playing this game is -$1, that is, a loss of $1.

Explanation:

Expected dollar value:

Probability of each outcome multiplied by it's monetary outcome.

Outcomes:

45% probability of winning $100.

45% probability of losing $100.

10% probability of losing $10.

What is the expected dollar value for a person playing this game?

`E = 0.45*100 - 0.45*100 - 0.1*10 = -1`

The expected dollar value for a person playing this game is -$1, that is, a loss of $1.