Find the expected value.
-In a large casino, the house wins on one of its games with a probability of 51%. All bets in the game are 1 : 1 . If you win, you gain the amount you bet; if you lose, you lose the amount you bet. What is
The expected value to the player of a single game?

Question

Quizplus · Accepted Answer

The expected value (EV) for the player can be calculated using the formula: EV = (Probability of Winning * Amount Won per Bet) + (Probability of Losing * Amount Lost per Bet). Given the house wins with a probability of 51%, the player wins with a probability of 49%. Since the bets are 1:1, the amount won or lost per bet is equal to the bet amount, which we can consider as $1 for simplicity. Thus, EV = (0.49 * $1) + (0.51 * -$1) = $0.49 - $0.51 = -$0.02.

Find the Expected Value