Fair price of a heads-majority bet
A fair coin is flipped four times. A bet pays $10 if heads are a strict majority (more heads than tails) and $0 otherwise. What is its fair price (in dollars, to two decimals)?
Show hints (2)+
- Four flips can tie 2–2, which is not a majority - so it is not simply .
- Count winners out of , then multiply by $10.
Answer
Reveal answer →Final answer
3.13 (± 0.01)
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Asked at: Timed Mental-Math & Sequences, Game-Based Aptitude