Question

Confused on how to answer these questions! I need help, any help this is part of a homework practice exercise -1. What is the expected net gain for Game 1. rounded to the nearest cent?The expected net gain for Game is $_____2. What is the expected net gain for Game 2. rounded to the nearest cent?The expected net gain for Game is $_____3. If someone was going to play only one of the two games many times, which game would be the better option?

Answer 1

Solution

Part 1

For this case we can do the following:

E(x)= -25*0.90 + 175*0.06+ 275*0.04= -1.00

Part 2

For this case we can do the following:

E(x)= -5*0.76 + 0*0.12+ 5*0.06+ 15*0.03+ 45*0.02+ 95*0.009+ 495*0.001= -0.80

Part 3

For this case in both games the expected value is negative but the one on which is most probable to loss less is on Game 2