It costs $50 to bet on a pig race. The pig has a 1/10 chance of...
It costs $50 to bet on a pig race. The pig has a 1/10 chance of winning and a 1/8 chance of placing 2nd or 3rd. You win $200 if the pig wins, $50 if the pig gets 2nd, and $20 if the pig gets 3rd. What is the expected net gain from a pig race?
Homework Answers
So,
50 is the cost of the bet
Thus,
Expected gain = 200 * 1/10 + 50 * 1/8 + 20 * 1/8 - 50
So,
Expected gain = -21.25
So, overall loss.
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