A die is rolled and if the outcome is an even number, a gambler receives $10. If the outcome is an odd number, the gambler loses $10. What is the expected value of this game?
What will be an ideal response?
Probability of getting an even number = 3/6 = 1/2.
Expected value of getting an even number = 1/2 × ($10 ) = $5.
Probability of getting an odd number = 1/2.
Expected value of getting an odd number = 1/2 × (-$10 ) = -$5.
Expected value of the game = $5 - $5 = $0.
Economics
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