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jmc

counting and probability junior

Problem

Suppose that we win \3\ if we flip tails. What is the expected value, in dollars, of our winnings after one flip?
Solution
In one flip, we have a chance of getting heads and winning 3 dollars, and a chance of getting tails and losing two dollars. So the expected value of one flip is E = \frac{1}{2}(\3) + \frac{1}{2}(-\2) = \boxed{\0.50}$.
Final answer
\$0.50