Problema Solution
Determine the expectation of a person who plays the game. Determine the fair price to play the game.A pointer shows $2, $5, $12. it cost $7 to play the game
Answer provided by our tutors
I believe the circle s where 2 is in half place 5 in 1/4 and 12 in 1/4
E(x) = sum(x*p(x))
= 2*1/2 + 5*1/4 + 12*1/4
= 1 + 1.25 + 3
= 5.25
since the expected value is 5.25 so the fair value should be 5.25 or less...