Emilie is playing a game. The probabilities that she will win $5, win $10 or lose $3 are 0.2, 0.1, and 0.7, respectively. What are Emilie's expected winnings losses?
What I did:
Wins: 5 (0.2) + 10 (0.1) = 2
Loss: 3 (0.7) = 2.1
correct, so the expected value of the game is
2-2.1 = -.1
So in the long-run you can expect to lose 10 cents in this game.