Expected Value

A bag contains 2 gold marbles, 7 silver marbles, and 23 black marbles. Someone offers to play this game: You randomly select one marble from the bag. If it is gold, you win $4. If it is silver, you win $2. If it is black, you lose $1.

What is your expected value if you play this game?

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  1. expected(gold) = $4(2/32) = 0.25
    expected(silver) = $2(7/32) = .4375
    expected(black) = -1(23/32) = -0.71875
    add them up to get -0.03125

    A "losing" game

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  2. Thanks

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  3. Very close. You just need to subtract the 1$ entrance fee from every prize pool.

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