Financial Expectation (1 Viewer)

[viserys]

In a game two unbiased coins are tossed. A player outlays $30 and if both coins show tails the player is paid $48, if both coins show heads the player is paid $60

What is the expected return from $300 for this game?

When finding the answer, should I take the $30 off the winnings? The answers for this particular question don't have it, but I've done financial expectation questions that say I should.

 

[laura-jayne14]

That's what I've been taught to do

 

[BLIT2014]

In a game two unbiased coins are tossed. A player outlays $30 and if both coins show tails the player is paid $48, if both coins show heads the player is paid $60

What is the expected return from $300 for this game?

When finding the answer, should I take the $30 off the winnings? The answers for this particular question don't have it, but I've done financial expectation questions that say I should.

What do the answers say? Is it a positive or negative number?

 

[viserys]

Positive.. They're worked answer though and they didn't take off the price of actually playing the game.
I took a look at the specimen exam or whatever it is put out by the BoS and the question they have on it factors in the price as well, so I'm just gonna continue doing it that way

 

[marmsie]

Was the answer they got $270?

Because it looks like they have subtly worded the question differently to what is normally asked.

They didn't technically ask for the financial expectation of the game, rather they asked for the expected returns if you pay $300 (i.e. 10 games). I have never seen a question worded like this, but it would imply that you are only interested in the returns (winnings) not the outlays (cost to play).

 

[BLIT2014]

Was the answer they got $270?

Because it looks like they have subtly worded the question differently to what is normally asked.

They didn't technically ask for the financial expectation of the game, rather they asked for the expected returns if you pay $300 (i.e. 10 games). I have never seen a question worded like this, but it would imply that you are only interested in the returns (winnings) not the outlays (cost to play).

I was thinking along the same lines

 

[viserys]

Was the answer they got $270?

Because it looks like they have subtly worded the question differently to what is normally asked.

They didn't technically ask for the financial expectation of the game, rather they asked for the expected returns if you pay $300 (i.e. 10 games). I have never seen a question worded like this, but it would imply that you are only interested in the returns (winnings) not the outlays (cost to play).

yeah from memory it was $270, that makes sense. thanks heaps!