Expected value Quiz

There is a twelve sided die.

A one or a twelve wins $9.00

All other numbers less than or equal to nine lose $2.00

All other numbers greater than or equal to ten lose $1.00. What is the expected value for the host.

• $2.00

• -$1.00

• $0.00 this is a fair game.

• $1.50

Tags

PS.SPMD.4

Using a deck of Uno cards (108 cards: 25 of each color plus eight wild cards): A player pays $1.00 to play. A wild cards pay $11.00. Calculate the expected value for the player.

• The player loses about 9 cents per play.

• The player wins about 9 cents per play.

• The player loses about 90 cents per play.

• The player wins about 90 cents per play.

Tags

PS.SPMD.4

Glass beads: in a jar there are:

16 orange beads

19 yellow beads

10 pink beads

5 blue beads

The player picks a bead at random. 

If the bead is pink the player wins $5.00. If it is blue the player wins $10.00. If it is orange the player pays $3.50. If it is yellow the player pays $2.50. Calculate the expected value for the host.

• The host loses 70 cents per game

• The host loses 7 cents per game

• The host wins 7 cents per game

• The host wins 70 cents per game

Tags

PS.SPMD.4

Pick a paw: There are six paw stickers, one of each color: orange, blue, green purple, yellow, and red facing downward. Pick a paw at random. If it is AJ colors (orange or blue), you win a coke (value $0.50). If it is any other color you pay $1.00. Is this a fair game?

• Yes, the expected value is $0

• No, the expected value is $0.50

• No, the expected value is -$0.50

• No, the expected value is -$1.00

Tags

PS.SPMD.4

Tech stocks typically have a different trend than the DJIA. Tech runs and tech busts do not follow the typical growth-recession cycle. Calculate an expected value for a $5000 investment in Google for a five year period.

Tech run 2/5 years gain 65%

Tech stable 2/5 years gain 28%

Tech bust 1/5 years lose 38%

What is the expected value of the $5000 investment at the end of the five year run?

• $6480

• $8250

• $3100

• $5000

Tags

PS.SPMD.2

A life insurance company sells a $250,000.00 life insurance policy to a 28 year old female in good health for an annual premium of $235.00. A 28 year old female in good health has a 0.999965 chance of surviving the year. What is the expected value for the insurance company if they sell 1000 such policies in a year?

• -$75,000

• $75,000

• -$226,250

• $226,250

Tags

PS.SPMD.2

A manufacturer is considering the manufacture of a new and better mousetrap. She estimates the probability that the new mousetrap is successful is 3/4 . If it is successful it would generate profits of $120,000. The development costs for the mousetrap are $98,000. What is the excpected gain or loss.

• Loss $65,500

• Gain $65,500

• Loss $74,000

• Gain $74,000

Tags

PS.SPMD.2

You take out a fire insurance policy on your home. The annual premium is $300. In case of fire, the insurance company will pay you $200,000. The probability of a house fire in your area is 0.0002. 

What is the home owners expected value? 

• $485,406.06

• -$195,406.06

• -$485,406.06

• $195,406.06

Tags

PS.SPMD.2

In the game Deal or No Deal the following dollar amounts are still available:

$1,000,000.00

$300,000.00

$50,000.00

$1000.00

$1

The banker is offering you $195.000.00. Based on expected value alone, should you take the offer?

• No the expected value is higher, $270200.20

• Yes, the expected value is lower, $170200.20

• No the expected value is higher, $470200.20

• Yes, the expected value is lower, $190200.20

Tags

PS.SPMD.4

The probability that you will make

85 on the quiz is 15%

70 on the quiz is 35%

60 on the quiz is 40%

50 on the quiz is 10%

The teacher will let you have your current average of 72 on the quiz. Should you take the offer.

• Yes, my expected value for taking the quiz is 66.25

• Yes, my expected value for taking the quiz is 6.25

• Yes, my expected value for taking the quiz is 16.25

• Nah, I know I can make better than a 72 on that quiz

Tags

PS.SPMD.2