Find the Expected Value of the Random Variable

question 42

Multiple Choice

Find the expected value of the random variable. Round to the nearest cent unless stated otherwise.
-Suppose you pay $2.00 to roll a fair die with the understanding that you will get back $4.00 for rolling a 4 or a 5, nothing otherwise. What is your expected value?

• A)-$2.00
• B)$2.00
• C)-$0.67
• D)$4.00

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Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period of time.

Total Revenue

The total income received by a firm from the sale of its products or services.

Price

Price is the amount of money expected, required, or given in payment for something, reflecting its value in terms of currency.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression, often representing a measure of some property.