Question

Math question? on expected value fair price. 10 pts best answer!?

Cannot figure out this one, i keep getting 22 but the answer is 18 and i have no idea how they got 18. here's question:

You are playing a game in which a single die is rolled. If a 2 or 5 comes up, you win $60, otherwise you lose $3. What is the price that you should pay to play the game that would make the game a fair price?

Answers

single die is rolled

win if 2 or 5 occurs winnings = 60

lose if anything else occurs winnings = -3

and probability of 2 or 5 is 1/3

probability of other outcomes is 2/3

so expected outcome is

60(1/3) + (-3)(2/3) = 20 + -2 = 18

Your answer of 22 suggests that you made error by ignoring the minus sign on the -3 in calculation

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