Don't understand how to find expected value

Question

Consider the following scenario.

the five-number bet

(a) Find the expected value of each $1 bet in roulette. (Round your answer to three decimal places.) 

 

(b) Interpret it. (Round your answer to one decimal place.)

Over time, you should expect to lose about  ? cents for every dollar you bet.

Answer 1

Hi Augustino G.,

Look up a general website with Roulette rules. I can't quote you one, Wyzant filters such replies out! You will find that a "five number" bet is for 0, 00, 1, 2, or 3 to come up; the payout is 6 to 1. That is, you'll get your dollar back, plus 6 more, on a $1 wager. Since the odds of hitting are 5/40 and the payout is (essentially) $7, the net return is 5x7 = 35/40. That's a considerable house edge! This is for an American wheel, with the 00. I leave the rest of the calc's to you. Important to note: To note: European roulette has better odds, since there are only 39 positions; also, there is a provision which may obtain to slightly increase your expected return.

-- Cheers, -- Mr. d.