If a gambler tries to play a game where he must select 1 of

If a gambler tries to play a game where he must select 1 of 5 cups. Under one cup there is a marker worth $100, under another cup there is a marker worth $10. It cost $25 to select one cup. The game ends after one selection. What is the expected payout in the game?

A) 22
B) 2
C) 3
D) -3
E) None of the above

Solution

sol)

Let X be the Random variable

X=-25, -15, 75

X -25 -15 75

P(x) 3/5 1/5 1/5

Expected payout=sum(x*p(x) ) = (-25*3/5)+(-15*1/5)+(75*1/5)

= -3