(i) Find his expected gain. (ii) How much should he pay to play the game if it is to be fair?

Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter12: Probability
Section12.CR: Chapter 12 Review
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A player tosses two fair coins. He wins
dollar 5 if 2 heads occur, dollar 2 if 1 head
occurs and dollar 1 if no head occurs.
(i) Find his expected gain.
(ii) How much should he pay to play the
game if it is to be fair?
Transcribed Image Text:A player tosses two fair coins. He wins dollar 5 if 2 heads occur, dollar 2 if 1 head occurs and dollar 1 if no head occurs. (i) Find his expected gain. (ii) How much should he pay to play the game if it is to be fair?
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