A fair bet is defined as a wager where the cost to participate (the amount you bet) is exactly equal to the expected value of the bet, meaning the average amount you would expect to win or lose over time if you could repeat the bet under the same conditions an infinite number of times.

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A Fair Bet Is

Question 10

Multiple Choice

A fair bet is

A) a bet for which the outcome is unknown by all participants.
B) a bet with a cost that is less than the expected value.
C) a bet with equally likely outcomes.
D) a bet for which the cost is exactly equal to the expected value.

Correct Answer: