Question

A game consists of tossing three coins. If all three coins land on heads, then the player wins $75. If all three coins land on tails, then the player wins $45. Otherwise, the player wins nothing. On average, how much should a player expect to win each game

Answer 1

Answer:

On average, a player should expect to win $15.

Step-by-step explanation:

The expected value in an event with outcomes:

x₁, x₂, ..., xₙ

Each with probability:

p₁, ..., pₙ

is given by:

Ev = x₁*p₁ + ... +xₙ*pₙ

In this case we have 3 outcomes:

player wins $75 = x₁

player wins $45 = x₂

player does not win = x₃

Let's find the probabilities of these events.

player wins $75)

Here we must have the 3 coins landing on heads, so there is only one possible outcome to win $75

While the total number of outcomes for tossing 3 coins, is the product between the number of outcomes for each individual event (where the individual events are tossing each individual coin, each one with 2 outcomes)

Then the number total of outcomes is:

C = 2*2*2 = 8

Then the probability of winning $75 is the quotient between the number of outcomes to win (only one) and the total number of outcomes (8)

p₁ = 1/8

Win $45:

This happens if the 3 coins land on tails, so is exactly equal to the case above, and the probability is the same:

p₂ = 1/8

Not wining:

Remember that:

p₁ + p₂ + ... + pₙ = 1

Then for this case, we must have:

p₁ + p₂ + p₃ = 1

1/8 + 1/8 + p₃ = 1

p₃ = 1 - 1/8 - 1/8

p₃ = 6/8

Then the expected value will be:

Ev = $75*1/8 + $45*1/8 + $0*6/8 = $15

On average, a player should expect to win $15.