Question

A game has 3 possible outcomes: The first outcome has the probability of 1/6. The result is winning $12. The second outcome has the probability of 1/3. The result is winning $3. The third outcome has the probability of 1/2. The result is losing $8.
In the long run, you will ______ $ ____ per game.

Answer 1

In the long run, you will lose $1 per game.

To find the expected value of this game, we have to multiply the chances by each prize. Then, add up all the possibilities.

(1/6) x $12 + (1/3) x $3 + (1/2) x $8 

2 + 1 - 4 = -1

On average, you will lose $1 per game.