Suppose Jack and Kate are at the town fair and are choosing which game to play.The first game has a bag with four marbles in it-1 red marble and 3 blue ones.The player draws one marble from the bag; if it is red,they win $20 and if it is blue,they win $1.The second game has a bag with 10 marbles in it-1 red,4 blue,and 5 green.The player draws one marble from the bag; if it is red,they win $20; if it is blue,they win $5; and if it is green,they win $1.Both games cost $5 to play.What is the expected value of the payoff in the first game?
A) $5.75
B) $5.00
C) $4.75
D) $4.50

Question

Quizplus · Accepted Answer

The expected value of the payoff in the first game is (1/4 * $20) + (3/4 * $1) = $5.75.

Suppose Jack and Kate Are at the Town Fair and Are