Find the expected value.
-Suppose you pay $2.00 to roll a fair die with the understanding that you will get back $4.00 for rolling a 4 or a 1, nothing otherwise. What is your expected net winnings?

Question

Quizplus · Accepted Answer

The expected net winnings can be calculated by multiplying the outcomes by their probabilities and summing these products. The probability of rolling a 4 or a 1 is 2/6 (since there are 6 sides on a die and 2 favorable outcomes). The winnings for these outcomes are $2 each ($4 received minus the $2 paid to play). For the other 4 outcomes, the net loss is $2 (nothing received minus the $2 paid to play). Thus, the expected value is (2/6)*$2 + (4/6)*(-$2) = -$0.67.

Find the Expected Value