3. ## Re: Expected Gain?

Originally Posted by ebaines
I assume that what you mean is that if he wins the bet he makes $300 and if he loses he is out$100.

The expected value of his winnings is the probability of each outcome times its outcome. In this case there is a 9/38 change of winning $300, and (38-9)/38 = 27/38 change of losing$100. So the expected outcome is:

5. ## Re: Expected Gain?

I realized the error and fixed it right after posting - it seems my correction occurred just a minute before your posting.

The wording of the problem is unclear. I've never heard the phrase "the host will triple his bet" before, so I'm not really sure what it's intended to mean. I'm guessing that it means "the house will pay off triple his bet," so he gets his original bet back plus three times that amount. But to be honest - only the person who wrote this problem knows what it means for sure.

6. ## Re: Expected Gain?

Originally Posted by ebaines
I realized the error and fixed it right after posting - it seems my correction occurred just a minute before your posting.
The wording of the problem is unclear. I've never heard the phrase "the host will triple his bet" before, so I'm not really sure what it's intended to mean. I'm guessing that it means "the house will pay off triple his bet," so he gets his original bet back plus three times that amount. But to be honest - only the person who wrote this problem knows what it means for sure.
All of that is certainly true.
However, is most gaming houses one pays to play.
In this case I would expect to pay $100 to play. If I won the house pays me$300 and nothing if I lose.