Question

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

Answer:

E(x) = -7

Step-by-step explanation:

This is middle school math? It uses some advanced statistics

E(x) = $(.3*-20)+(.2*-40)+(.1*50)+(.4*5)$

E(x) = -7

Bill should not play the game as he will lose money on average

If Bill owns the game, he should play it as it would be an effective way to launder money