I have tried this problem numerous times and cannot solve for the variance. Can someone help me?
"In a game a player either wins $10 with a probability of 1/8 or loses $1 with a probability of 7/8. What are the expectation and variance of the total net winnings of a player after 50 turns at the game?"
I found the expectation to be 18.75 dollars, but cannot get the variance which is supposed to be 25.72 dollars. Is the book wrong or is it just me?
The answer given by the book is the standard deviation, not the variance.
Originally Posted by jarny