Consider the following game. You roll a six-sided die and each time you roll a 1, you get $50. For all other outcomes you pay $10. Since the expected value of this game is $0, the game is called a(n)
A) gamble.
B) fair bet.
C) even game.
D) zero sum game.

Question

Quizplus · Accepted Answer

A fair bet is defined as a bet where the expected value is zero, meaning that over time, you neither gain nor lose money on average. In this game, the probability of rolling a 1 is 1/6, giving you $50, and the probability of rolling any other number (2-6) is 5/6, costing you $10. The expected value is calculated as (1/6)*$50 + (5/6)*(-$10) = $0, making it a fair bet.

Consider the Following Game