Question

In a game, a die is thrown and has the following probability distribution. The game is free to play. The payoff for some of the values was randomly generated: Outcome 1 2 3 4 5 6 Probability 1 6 1 6 1 6 1 6 1 6 1 6 Payoff $3 $5 -$10 $11 $3 ? What would the payoff of the outcome of 6 have to be for this to be a fair distribution? (Hint: expected value = $0

Answer 1

For a fair distribution that means there needs to be an equal amount of money to win or lose.

Therefore answer is -$12.

Explanation: