Answer:
The gambler's expected value if he makes the bet is $45.
Step-by-step explanation:
Expected value:
15% probability of a profit of $2000.
100 - 15 = 85% probability of having to pay $300, that is, a loss of $300.
The expected value is each outcome multiplied by it's probability, so:
[tex]E = 0.15*2000 - 0.85*300 = 45[/tex]
The gambler's expected value if he makes the bet is $45.
