correct answer will get 10 points
5. Find the expected payback for a game in which you bet $10 on any number from $0 to $499
if your number comes up you get $1000?
5. Find the expected payback for a game in which you bet $10 on any number from $0 to $499
if your number comes up you get $1000?
-
E(X) = -10*1 + (1/500)*1000 = -$8
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You bet $10 to guess a number from 0~499. The probability is 1/500 to correctly guess the number.
And if you win, you get $1000. Since the probability of getting the answer right is 1/500, you multiply 1/500 and $1000. Since you betted $10 on guessing a number, you will probably lose more money than gaining. So (1/500)*1000 - 10
=2 - 10
=-8
-8 is your expected value
ANSWER
$-8
Not much chance of winning do we? :/
Please pick me :) :D
And if you win, you get $1000. Since the probability of getting the answer right is 1/500, you multiply 1/500 and $1000. Since you betted $10 on guessing a number, you will probably lose more money than gaining. So (1/500)*1000 - 10
=2 - 10
=-8
-8 is your expected value
ANSWER
$-8
Not much chance of winning do we? :/
Please pick me :) :D