Question

Suppose a basketball player has made 213 out of 427 free throws. If the player makes the next 2 free throws, I will pay you $115. Otherwise you pay me $37. Step 1 of 2 : Find the expected value of the proposition. Round your answer to two decimal places. Losses must be expressed as negative values.

Answer 1

Answer:

The player shooting 213/427 is a free throw percentage of 49.88%.

We can now estimate his probability of making the next 2 shots as

(0.4988)^2 =0.2488

So now to find the expected value, you just need to find the value of each possible outcomes (he makes both or he doesn't)

P(makes both) * (Value when you win) + P(misses both) * (value when you lose)

0.2488*$115+(1-0.2488)*(-$37)

= 28.612-27.7944

$0.8176