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3 May, 00:12

In a gambling game a man is paid $5 if he gets all heads or alltails when three coin are tossed, and he will pay out $3 if eitherone or two heads show.

a. Construct a probability distribution for this situation

b. What is his expected gain

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  1. 3 May, 02:46
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    Total 8 outcomes

    a) X: gain

    X = + 5 P (X = - 5) = 2/8 = ¼

    X = - 3 P (X = - 3) = ¾

    b) E (X) = (5*¼) + (-3*¾l = - 1

    expected gain is - 1

    Which means expected loss is $1
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