Chapter 4, Problem 79H

A friend’ offers you the following deal. For a $10 fee, you may pick an envelope from a box containing 100 seemingly identical envelopes. However, each envelope contains a coupon for a free gift.

• Ten of the coupons are for a free gift worth $6.

• Eighty of the coupons ate for a free gift worth $8.

• Six of the coupons are for a free gift worth $12.

• Four of the coupons axe for a free gift worth $40.

Based upon the financial gain or loss over the long run, should you play the game?

a. Yes, I expect to come out ahead in money.

b. No, I expect to come out behind in money.

c. It doesn’t matter. I expect to break even.