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?
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