Calculate the expected monetary value of the following bet I
Calculate the expected monetary value of the following bet: In a single-draw card game that costs $5 to play, you win $500 if you draw either a jack or a diamond.
Solution
Consider:
Hence,
E(x) = Sum(xP(x)) = $148.8462 [ANSWER]
| x | P(x) | x P(x) |
| -5 | 0.692308 | -3.46154 |
| 495 | 0.307692 | 152.3077 |
