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Question

In a game, the probabilities of winning an amount(x) are given in the table below. The expected payout is the weighted mean of the observations with their probabilities. Find the expected payout.
Amount (x)0102030405060Probability (w)0.250.20.150.150.10.10.05


  1. Rs. 18
  2. Rs. 21.5
  3. Rs. 24.5
  4. Rs. 30


Solution

The correct option is B Rs. 21.5

Weighted mean=WXWWX=0.25×0+0.2×10+0.15×20+0.15×30+0.1×40+0.1×50+0.05×60=0+2+3+4.5+4+5+3=21.5W=0.25+0.2+0.15+0.15+0.1+0.1+0.05=1Expected Payout=21.51=Rs. 21.5

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