Question

dear class,
you have 80 minutes to complete this practice exam from the moment you open it.
although a rare occurrence, if any image or diagram does not display properly on your computer monitor, simply take a snapshot of the issue as evidence using your cellphone, and then continue with completing and submitting your exam. after you finish and submit your exam, then please send me the snapshot of the issue.
question 1
1 pts
in a certain game, there is no cost to play the game, and the pay off can be $0, $5, $0, $-1, each with probabilities as shown in the following table:
compute the expected payoff and enter the final answer in the box provided below without rounding it.
note: a negative expected payoff indicates a net expected loss.

Explanation:

Step1: Recall the formula for expected value

The formula for the expected value \(E(X)\) of a discrete random variable is \(E(X)=\sum_{i}x_ip_i\), where \(x_i\) are the outcomes and \(p_i\) are their corresponding probabilities.

Step2: Substitute the values into the formula

We have \(x_1 = 0\), \(p_1=0.21\); \(x_2 = 5\), \(p_2 = 0.24\); \(x_3=0\), \(p_3 = 0.25\); \(x_4=-1\), \(p_4=0.30\).

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Step3: Calculate the result

\(E(X)=1.2 - 0.3=0.9\)

Answer:

\(0.9\)