Question

If you draw a card with a value of three or less from a standard deck of cards, I will pay you $6. If not, you pay me $5. (Aces are considered the highest card in the deck.) 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:

Expected value of proposition= -$2.46

Explanation:

A card deck is made up of 52 cards. Assuming Aces of one, two and three are less than three. We will have 12 cards ( 3 from each of the four signs).

Probability of card of 3 or less= chance of positive outcome/total cards

Probability of a card of 3 or less= 12/52

Probability of drawing a card that is above 3 = 1-(12/52)= 40/52

Expected value of the proposition= (6*12/52) + (-5*40/52)

Expected value of the proposition= 1.3846- 3.8462

Expected value of proposition= -$2.4616~-$2.46

This is not a favourable odd and the player will most likely fail to make any profit.