Question

Calculate the expected value with the information given.

1). You are trying to figure out if you can make money off of a new,

and, maybe, poorly constructed, dice rolling game. Each time you play

you must wager exactly $1. If you roll a 1-4 on a ten sided die, you

will then roll an 8 sided die and receive 10¢ times the number

rolled. If you roll a 5-8 on the ten sided die, you will receive

nothing. Finally, if you roll a 9-10 you will receive $1 times the

number rolled on a four sided die. What is the expected value for

each time you play this game in dollars (Remember to account for the

$1 wager!)?

2). You are an investor and are deciding which business to invest $500

in. One business has a 70% probability of netting $2 in profit for

every dollar invested. The second business has a 40% chance of

profiting $5 for every dollar invested. How much money would you

expect to profit from each of the two businesses if you invested

$500?

3). There is a 0.00000034223% chance you will win the Power Ball with

a $1 ticket. The current jackpot is $80 million. What is the expected

value of playing the Power Ball lottery?

Answer 1