Two teams, A and B, are about to play a game. Previous records show that A has an 80% chance of winning, while B has a 20% of winning. Spectators can either choose to buy regular tickets or special tickets. A spectator with a special ticket will receive a refund of $2 if team A wins and a refund of $5 if team B wins. How much extra, minimally, should the special ticket cost to cover the expected value of the refunds offered?
$16.00
$2.60
$26.00
$3.00
$10

Question

dumbcow · Answer

Expected Value = Sum of amount won *probability
----> 2(0.8) + 5(0.2) = 2.60