Kevin Thinks He Can Use ESP to Predict the Outcome

question 7

Multiple Choice

Kevin thinks he can use ESP to predict the outcome of rolling a fair die. You agree to pay him $3 if he can correctly predict the results of the next roll. Kevin has to pay you $1 if he is wrong. If Kevin doesn't have any psychic powers, which of the following is closest to the expected value of your net winnings on this bet?

• A) -$0.67
• B) -$0.33
• C) $0
• D) $0.33
• E) $0.67

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