Consider the following scenario when answering the following questions:
Ivett and Desiree are considering playing a game called Twenties versus Fifties.In this game,Ivett will place a $20 bill on the table,and Desiree will place a $50 bill on the table.Both players will then toss a fair coin.If both Ivett and Desiree toss heads or if they both toss tails,Ivett wins the $70 on the table.If one woman tosses heads and the other tosses tails,Desiree wins the $70 on the table.
-For Ivett,the expected value of this game is
A) $0.
B) $15.
C) $35.
D) $70.
E) $140.

Question

Quizplus · Accepted Answer

Expected value can be calculated as the probability of winning times the amount you win.

There are 4 equally likely outcomes:
1. Ivett tosses heads and Desiree tosses heads - Ivett wins $70
2. Ivett tosses tails and Desiree tosses tails - Ivett wins $70
3. Ivett tosses heads and Desiree tosses tails - Desiree wins $70
4. Ivett tosses tails and Desiree tosses heads - Desiree wins $70

The probability of Ivett winning is 1/2 * 1/2 + 1/2 * 1/2 = 1/2
The expected value for Ivett is (1/2 * 1/2 + 1/2 * 1/2) * $70 = $35

Therefore, the best choice is B.

Consider the Following Scenario When Answering the Following Questions