A game is set up such that you have a 2/5 chance of winning $450 and a 3/5 chance of losing $100. What is your expected gain?

A-120
B-70
C-45
D-30

I ended up getting C. Can someone else work this problem out and see if they also get it?

Question

A game is set up such that you have a 2/5 chance of winning $450 and a 3/5 chance of losing $100. What is your expected gain?

A-120
B-70
C-45
D-30

I ended up getting C.  Can someone else work this problem out and see if they also get it?

tkhunny · Answer

Expected Gain?  How much is charged to play the game?

How did you get C?  And is that +45 or -45?

anonymous · Answer

No more information is given.

jim_thompson5910 · Answer

2/5 chance of winning
you win $450

so this multiplies out to (2/5)*450 = 180

----------------------

3/5 chance of losing $100
this multiplies out to (3/5)*(-100) = -60

-----------------------

Now add the two results:

180 + (-60) = 120

So you expect to gain $120 (on average) for any given turn