Question

Right answers only please

Bill is playing a game of chance with the following payout. 30% of the time you will lose 20 dollars, 20% of the time you lose 40 dollars, 10% of the time you win 50 dollars, 40% of the time you win 5 dollars. Find the expected value of the event and explain if Bill should play this game based on the mathematical expectation

Answer 1

9514 1404 393

Answer:

lose $7

should not play

Explanation:

Bill's expected winnings are ...

0.30(-20) +0.20(-40) +0.10(+50) +0.40(+5) = -6 -8 +5 +2 = -7

The expected value of the event for Bill is "lose 7 dollars." Based on this, Bill should not play.