Asked by Villanueva, Mitz April on Sep 24, 2024
In a coin toss bet,where both heads and tails are equally likely,you win a $2 on heads but lose $1 on tails.The expected value of the bet is
A) $0.50
B) -$0.50
C) $1.00
D) $0.00
Coin Toss
A simple randomness procedure used to decide between two equally probable outcomes with the flip of a coin.
Expected Value
The predicted value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence.
- Familiarize yourself with the idea of expected value and how to figure it out in elementary cases.
- Discriminate between just and unjust games by employing the expected value criterion.
Learning Objectives
- Familiarize yourself with the idea of expected value and how to figure it out in elementary cases.
- Discriminate between just and unjust games by employing the expected value criterion.