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Old 05-03-2009, 12:31 AM   #1
ScottStuart
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Default Question on probability

You joined an office “pool.” There are 8 teams that you can bet on. You bet on the mighty Coyotes that have won 40% of the games played so far this season. You decided to bet $5.00 on them. If you lose, you lose your $5.00. If you win, you get back your $5.00 and get another $5.00. If you bet on the Coyotes all season and the probabilities remain the same, what is the expected value of each bet?

Thanks if anyone knows this trick question. I feel like there are so many unnecessary pieces of information that I'm being thrown off, or maybe I'm just a dumbass.


I'm guessing the value of each bet goes up $5 and there are 7 teams the coyotes play so since the probabilities remain the same it should be

$5, $10, $15, $20, $25, $30, $35.

Right?
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Old 05-03-2009, 12:48 AM   #2
Knuck the Ficks
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Default Re: Question on probability

I don't see any trick here, unless you've misworded the question.

The expected value of one bet would be -5*(1-0.4)+5*0.4
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Old 05-03-2009, 12:58 AM   #3
ScottStuart
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Default Re: Question on probability

Quote:
Originally Posted by Knuck the Ficks
I don't see any trick here, unless you've misworded the question.

The expected value of one bet would be -5*(1-0.4)+5*0.4

So the answer is $-1 ?

Yea, it's the expected value of each bet, not one bet. Sounds right but I'm not sure.

Thanks for your help knuck the ficks

Last edited by ScottStuart : 05-03-2009 at 01:19 AM.
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