Question

There is a game at the carnival that costs $20 to play. There are two outcomes: either you win $100 , or you lose. To play you roll a die. If a six appears you win; all other rolls you lose. if 1000 people played this game during one afternoon what would you expect to be the outcome?
A. the game earns $3330

B. the game earns $1660

C. the game loses $3330

D. the game loses $1660

Answer 1

Outcome on winning = $100 - $20 = $80
Outcome on losing = $20

Probability of winning = 1/6
Probability of losing = 5/6

Expected Value = 1/6 (80) +5/6(-20) = -3.333

This shows on average from each game, the game earns $ 3.333.

So, if 1000 such games are played, the game will earn 1000 x 3.33 = $3330 

So, the answer to this question is option A