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November 5th, 2007, 06:00 PM   #1
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Probability Distribution

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November 5th, 2007, 06:39 PM   #2
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Chance of 3: 1/4
Payoff for 3: $2

Chance of non-3: 3/4
Payoff for non-3: -$2

Expected return: 1/4 * $2 + 3/4 * -$2

These values are for the player. For the house, reverse the sign for each dollar amount.
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November 5th, 2007, 08:53 PM   #3
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Thanks CR as always

How accurate are these results

Quote:
Each result 1, 2, 3, and 4 has an equal chance of occuring and that is 1/4.

So the player wins with probility 1/4 and loses with probability 3/4.

His expected return is:

r = (4)(1/4) + (0)(3/4) - 2 = -1

That is he gets $4 a quarter of the time $0 3/4 of the time and always pays
$2 to play. We could treat the cost to play differently to get:

r = (2)(1/4) + (-2)(3/4) = -1.
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November 5th, 2007, 08:56 PM   #4
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Quote:
Originally Posted by Infiniti
How accurate are these results


Perfectly, of course.
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