If you draw two clubs on two consecutive draws you win $579, otherwise you pay me $35. What is the expected va?
If you draw two clubs on two consecutive draws you win $579, otherwise you pay me $35. What is the expected value of the proposition?
A-Best: From a normal 52 card deck,
probability of club on first draw is 1/4 (or 13/52)
club on second draw is 12/51
Total probability is 1/4 * 12/51 = 3/51 = 1/17
Remaining probability is 16/17
So you have expected value of
1/17 * 579 - 16/17 * 35 = 34.06 - 32.94 = about $1.12 ($1.11765 to be more exact)
If you can find someone to play this repeatedly, take them up on it!
