Dear Forum , I having issues with the following any feedback would be appreciated..
Two coins are flipped. You win $2 if either 2 heads or 2 tails turn up; you lose $3 if a head and a tail turn up? What is the expected value of the game?
thanks -AC 360-
The formula for this type of questions is
You need to conduct 3 steps
1) List each possible event
2) State the probability of each event occurring
3) State the outcome associated with each event
Event:2H 1H1T 1T1H 2T
Prob.: 0.25 0.25 0.25 0.25
Outcome: +2 -3 -3 +2
Use the formula: