Find Expected Value of a Game Practice Test

A simple wager works like this: you pay $1 to flip a fair coin. If it lands heads, you receive $3; if it lands tails, you receive $0. (Net payoff = winnings minus $1.) What is the expected value (long-run average net gain/loss) for the player on one play?

A student pays $2 to draw one card from a small deck of 10 cards: 3 cards say “Win $4,” 2 cards say “Win $1,” and 5 cards say “Win $0.” These are the only outcomes. What is the expected value (long-run average net gain/loss) for the player for one draw, including the $2 cost?