Question

In a game, you have a 1/50 probability of winning $53 and a 49/50 probability of losing $3 What is your expected value?

Answer 1

Expected Value is $4

Explanation:

Expected value is the probabilities multiplied by the value of each of those probabilities. In our case

EV = (1/50)*53 + (49/50)*-3

EV = 1.06 - 2.94

EV = -1.88