Expected value If on a $1 bet, Paul Goldstein's expected value is 0.30, what is Paul's expected value on a $5
bet. I got 1.50 but my teacher said it wasn't correct.
To find Paul Goldstein's expected value on a $5 bet, you need to understand how the expected value is calculated. The expected value is the sum of the products of each possible outcome and its corresponding probability.
Let's assume there are two possible outcomes: winning and losing. The probability of winning on a $1 bet is not given, so we cannot calculate the exact probability. However, we know that the expected value on a $1 bet is 0.30. This means that, on average, Paul expects to win $0.30 per $1 bet.
To calculate the expected value on a $5 bet, we need to consider the proportional increase in the amount bet.
Since a $1 bet has an expected value of $0.30, we can calculate the proportion of the expected value to the amount bet: 0.30 / 1 = 0.30.
Now, we can apply this proportion to the $5 bet: 0.30 * 5 = $1.50.
Therefore, Paul Goldstein's expected value on a $5 bet would be $1.50.
If your teacher said this answer is incorrect, it could be due to different factors, such as rounding errors or additional information provided. It's recommended to clarify with your teacher to understand the specific reason for the discrepancy and to ensure you have all the necessary information to correctly calculate the expected value.
expected value on $1 is .30
expected value on $5 is 5(.30) = $1.50
You are correct!