Question

In each turn of a game you toss two coins. if 2 heads come up, you win 2 points and if 1 head comes up you win 1 point. if no heads come up, you lose 3 points. what is the expected value of the number of points for each turn?

Answers

  1. The expected value of the number of points for each turn is 0.25

    What is expected value?

    Expected value describes the long term average level of a random variable based on its probabilty distribution.
    Now, Probability that 2 heads come up is
    P(2 is H) = 1/4
    Probability that 1 heads come up is
    P(1 is H) = 2/4
    ⇒P(1 is H) = 1/2
    Probability that no head will come up
    P(no H’s) = 1/4
    Hence, the expected value for winning of 2points, 1point and  lose of3 points is given as-
    Expected value = 2 * P(2 is H) + 1 * P(1 is H)  – 3 * P(no H’s)
    ⇒Expected value = 2 * 1/4 + 1 * 1/2 – 3 * 1/4
    = 0.5 + 0.5 – 0.75
    ⇒Expected value = 0.25
    More about Expected value :
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