Suppose that you pay $1 to play a game in which a pair of fair dice are rolled.For each 2 that shows on a die you receive $2.To the nearest cent,your expected loss on each play is
A) $0.67.
B) $0.33.
C) $0.25.
D) $0.15.
E) $0.07.

Question

Quizplus · Accepted Answer

The probability of rolling a 2 on a fair die is 1/6. Since there are two dice, the expected value calculation for each die is independent. For each die, the expected value of the payout is (1/6)*$2 = $0.33 (since you get $2 for rolling a 2). Therefore, for two dice, the total expected payout is 2*$0.33 = $0.67. Since you pay $1 to play, the expected loss is $1 - $0.67 = $0.33.

Suppose That You Pay $1 to Play a Game in Which