Suppose you bet $1 on red at the roulette wheel.

Question

There are 18 red numbers and 20 nonred numbers (including the green 0 and 00). You win $1 if a red number comes up, and you lose $1 if any other number comes up. What is your expected value for this wager? (Round your answer to one decimal place.)
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Answer 1

There are 18+20=38 possible outcomes in this game.  The probability of getting a red number is 18/20.  The probability of getting a nonred number is 20/38.  To find the expected value, multiply each probability by the amount gained (+1) or lost (-1).  Therefore the expected value is (18/38)•(+1)+(20/38)•(-1)=-2/38 or -$0.05.  So if you played 100 games for $1 each, you would expect to lose 100*(-0.05) or $5.00