Answer:

E[W] = $25 (assuming the currency is in dollars)

Var(W) = 1041.67

Step-by-step explanation:

Probability of winning first starts with the coin toss.

For a win, the coin needs to land on heads.

Probability of that = 1/2 = 0.5

Then probability of winning any amount = 1/100 = 0.01

Total probability of winning any amount = 0.5 × 0.01 = 0.005

But expected value is given by

E(X) = Σ xᵢpᵢ

where xᵢ is each amount that could be won

pᵢ is the probability of each amount to be won and it is the same for all the possible winnings = 0.005

So,

E(W) = Σ 0.005 xᵢ

Summing from 0 to 100 (0 indicating getting a tail from the coin toss). This could be done with dome faster with an integral sign

E(W) = ∫ 0.005 x dx

Integrating from 0 to 100

E(W) = [0.005 x²/2]¹⁰⁰₀

E(W) = [0.0025 x²]¹⁰⁰₀ = 0.0025(100² - 0²) = 0.0025 × 10000 = $25

Variance is given by

Variance = Var(X) = Σxᵢ²pᵢ − μ²

μ = expected value

We calculate the expression, Σxᵢ²pᵢ which is another sum from 0 to 100

Σxᵢ²pᵢ = Σ 0.005xᵢ²

Σ 0.005 xᵢ² = ∫ 0.005 x² dx

Integrating from 0 to 100

∫ 0.005 x² dx = [0.005 x³/3]¹⁰⁰₀ = [0.1667x³]¹⁰⁰₀ = 0.1667(100³ - 0³) = 1666.67

Var(W) = 1666.67 - 25² = 1666.67 - 625 = 1041.67.