1. What is the expected value of playing this game ? a. The player repeatedly rolls a six - side d die until it comes up 6. b. When the die comes up 6 , the player receives a payoff, and the game ends. The player get s precise ly one payof f. c. The initial payoff is $6, and it increases by 20%. The f irst roll payoff is $6 ; the second roll payoff is $7.20 (1.2*$6) ; the third roll payoff is $8.64 (1.2*$7.20), and so on. What is the expected value of playing this game?
1. What is the expected value of playing this game ? a. The player repeatedly rolls a six - side d die until it comes up 6. b. When the die comes up 6 , the player receives a payoff, and the game ends. The player get s precise ly one payof f. c. The initial payoff is $6, and it increases by 20%. The f irst roll payoff is $6 ; the second roll payoff is $7.20 (1.2*$6) ; the third roll payoff is $8.64 (1.2*$7.20), and so on. What is the expected value of playing this game?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. What is the expected value of playing this game ? a. The player repeatedly rolls a six - side d die until it comes up 6. b. When the die comes up 6 , the player receives a payoff, and the game ends. The player get s precise ly one payof f. c. The initial payoff is $6, and it increases by 20%. The f irst roll payoff is $6 ; the second roll payoff is $7.20 (1.2*$6) ; the third roll payoff is $8.64 (1.2*$7.20), and so on. What is the expected value of playing this game?
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