College Algebra 7th Edition

Published by Brooks Cole
ISBN 10: 1305115546
ISBN 13: 978-1-30511-554-5

Chapter 9, Counting and Probability - Section 9.4 - Expected Value - 9.4 Exercises - Page 680: 8

Answer

$\$1.00$

Work Step by Step

There are $4$ possible outcomes for this game: HH, HT, TH, and TT. Each has a probability of $0.25$ as they are all equally likely to occur. Their 'payouts' are $4$, $1$, $1$ and $-2$, respectively. $0.25\times4 + 0.25\times 1 +0.25\times 1 -2\times 0.25= 1$ Therefore the expected return on this game is $\$1$.
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