Question

A die is rolled. if it rolls to a 1 or 2, you win 2 usd. if it rolls to a 3, 4, 5, or 6, you will lose 1 usd. what is the expected payoff from rolling this die?

Answer 1

The expected payoff from rolling the die is 0 usd.

According to the given question.

A die is rolled.

So, the possiblbe outcomes for a dice = {1, 2, 3, 4, 5, 6}

⇒ Total number of outcomes = 6

Also, it is given that

If a die is roll to a 1 or 2, we win 2usd and if it rolls to 3, 4, 5, or 6 we lose 1 usd.

As, we know that "Probability denotes the possibility of the outcome of any random event". And probability of any event can be calculated as

P(E) = total number of favorable outcomes/ Total number of outcomes

So,

The probability that die rolls 1 or 2 = 1/6 + 1/6 = 2/6 = 1/3

And, the probability thet die rolls 3, 4, 5, or 6

= 1/6 +  1/6 + 1/6 + 1/6

= 4/6

= 2/3

Therefore, the excepted payoff from rolling this die

= $2\times\frac{1}{3} - 1\times\frac{2}{3}$

$= \frac{2}{3} - \frac{2}{3}$

= 0 usd

Hence, the expected payoff from rolling the die is 0 usd.

Find out more information about expected payoff and probability here:

brainly.com/question/13201957

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