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