A coin that branches into a die
You play this game: flip a fair coin. On heads you are paid $10 and stop. On tails you instead roll a fair six-sided die and are paid twice the number it shows. What is the fair value of the game (in dollars, to two decimals)?
Show hints (2)+
- Value the die branch first: twice a fair die's mean.
- Then weight the two branches by 1/2 each.
Answer
Reveal answer →Final answer
8.5
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Asked at: Probability & Market-Making, Data-Driven Research