MediumDiscrete distributions

OpenStax, Introductory Statistics 2e §4.2 Mean or Expected Value and Standard Deviation · Exercise 29 · Probability · Discrete distributions

Mean or Expected Value and Standard Deviation · Exercise 29

A “friend” offers you the following “deal.” For a $10 fee, you may pick an envelope from a box containing 100 seemingly identical envelopes. However, each envelope contains a coupon for a free gift.

• Ten of the coupons are for a free gift worth $6.
• Eighty of the coupons are for a free gift worth $8.
• Six of the coupons are for a free gift worth $12.
• Four of the coupons are for a free gift worth $40.
Based upon the financial gain or loss over the long run, should you play the game?
(a) Yes, I expect to come out ahead in money.
(b) No, I expect to come out behind in money.
(c) It doesn’t matter. I expect to break even.

~8 minWritten answer · compare with the solution

OpenStax, Introductory Statistics 2e · §4.2 Mean or Expected Value and Standard Deviation · Exercise 29

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