Question

in a gambling game, for every play, there is a 0.1 probability that you win $7 and a 0.9 probability that you lose $1. What is the expected value of this game?

Answer 1

Answer:

The expected value of this gambling game = $ 0.2

Step-by-step explanation:

The probability of winning $ 7 = 0.1

The probability of losing $ 1 = 0.9

The expected value of this game = total probability of winning and losing

  = 0.1 (7) + 0.9 (-1)

[ -1 indicates losing and so negative sign ]

   = 0.7 - 0.9

   = - 0.2

   = $ 0.2