In a coin toss bet,where both heads and tails are equally likely,you win a $2 on heads but lose $1 on tails.The expected value of the bet is
A)$0.50
B)-$0.50
C)$1.00
D)$0.00

Question

​In a coin toss bet,where both heads and tails are equally likely,you win a $2 on heads but lose $1 on tails.The expected value of the bet is
A)​$0.50
B)-$0.50
C)$1.00
D)​$0.00

Quizplus · Accepted Answer

The expected value is calculated by multiplying each outcome by its probability and summing these products. For heads, the expected value is $2 * 0.5 = $1. For tails, it is -$1 * 0.5 = -$0.5. Adding these together gives $1 - $0.5 = $0.50.

​In a Coin Toss Bet,where Both Heads and Tails Are

In a Coin Toss Bet,where Both Heads and Tails Are