Question
4. A carnival game has the following payouts:
payout (x) $10 $20 $30 $40
probability (p) 40% 25% 20% 15%
a) If you play the game repeatedly, what is the expected value (long-run average) of the payouts?
b) What does the carnival have to charge to make this a fair game?
payout (x) $10 $20 $30 $40
probability (p) 40% 25% 20% 15%
a) If you play the game repeatedly, what is the expected value (long-run average) of the payouts?
b) What does the carnival have to charge to make this a fair game?