Suppose Chris is offered the following gamble: with probability 0.1 he will win $90, with probability 0.4 he will win $50, and with probability 0.5 he will lose $60. The expected value of this gamble is ______.

Question

Quizplus · Accepted Answer

The expected value of a gamble is the sum of the products of the possible outcomes and their probabilities. In this case, the expected value is:(0.1 * $90) + (0.4 * $50) + (0.5 * -$60) = $9 - $20 - $30 = -$1

Suppose Chris Is Offered the Following Gamble: with Probability 0