Answer
If the horse wins, profit =\$ 100
If the horse comes 2nd or third, profit = 0
If the horse ends up in a different place, profit = -\$25
Summing up all the probabilities = 100 x 1/8 + 25 x 2/8 -25 x 5/8
= $ -3.13
Work Step by Step
As given in answer
