You play a gambling game with a friend in which you roll a die. If a 1 or 2 comes up, you win $6.

Question

You play a gambling game with a friend in which you roll a die. If a 1 or 2 comes up, you win $6. Otherwise you lose $2. What is your expected value for this game? Round your answer to the nearest cent.

The expected value is $  .

Answer 1

$4.

When you roll a die, the probability of 1 or 2 outcome is 2 out of 6, so you can win 2X6 = $12

Other outcomes which you lose will be 4 out of 6, so it can be 4X2 = $8

Therefore, you can expect to win 12-8 = $4.