Answer to Question #128107 in Economics for Fredrica

Question

Suppose that someone offers you a bet concerning the tossing of a pair of fair dice. If both die turn up the same number you will win $240. Otherwise you must pay $60. Your expected winning is ?

Answer 1

The probability of both die turn up the same number is 6/36 = 1/6.

Your expected winning is:

$240×1/6 + (-60)×(1 - 1/6) = - 10.$