A person spins the pointer and is awarded the amount indicated by the pointer.

Question

(A circle with 3 sections divided: $2, $5, $10). The pointer stops on $2.

It costs $6 to play the game. Determine:

a.) The expectation of a person who plays the game.

b.) The fair price to play the game.

Answer 1

a) expected value: 2*1/3 + 5*1/3 + 10*1/3
1/3(2+5+10)=17/3 dollars

fair price: 5.67