Question

PLZZZZ HELP!!!

Answer 1

Answer:

• Expected Value= -$7
• Bill should not play the game

Step-by-step explanation:

In the game, these are the 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.

To compute the expected value, take note that a loss is negative while a win is positive.

$E(X)=\sum_{i=1}x_1P(x_1)$

Therefore:

E(X)=(-20*0.3)+(-40*0.2)+(50*0.1)+(5*0.4)

E(X)=-7

• The expected value of the event is -$7.
• Based on the negative expectation, Bill should not play this game as he is expected to incur a loss.