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2 years ago

9

how is it possible for the expected value of a game to be losing 65 cents of the only outcomes are win $2 or lose $1

1 answer:

Stells [14]2 years ago

4 0

Let x be the probability of winning and let y be the probability of losing. Then we can write the following equation:
2x - y = -0.65 ..............(1)
the sum of the probabilities of winning and losing must equal 1.
x + y = 1............(2)
Rearranging (2), gives:
y = 1 - x ............(3)
Plugging the expression for y from (3) into (1), we get:
2x - 1 + x = -0.65
which simplifies to:
3x = 0.35
Therefore x = 0.117 and y = 0.883.
The expected value of the game will be a loss of 65 cents if the probability of winning is 0.117 and the probability of losing is 0.883.

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