Posted by Michelle on .
A game is played flipping three coins. If all three coins land heads up you win $15. If two coins land heads up you win $5. If one coin lands heads up you win $2. If no coins land heads up you win nothing. If you pay $4 to play, what are your expected winnings?
HHH: expectation = 15(1/8) = 1.875
2H,1T: expectation = 5(3/8) = 1.875
1H,2T expectation = 2(3/8) = 0.75
TTT expectation = 0(1/8) = 0
total expected winnings = 4.5
Since you are paying $4 to win $4.50, you would never ever see this game in a place like Vegas