Question

# It costs \$50 to bet on a pig race. The pig has a 1/10 chance of...

It costs \$50 to bet on a pig race. The pig has a 1/10 chance of winning and a 1/8 chance of placing 2nd or 3rd. You win \$200 if the pig wins, \$50 if the pig gets 2nd, and \$20 if the pig gets 3rd. What is the expected net gain from a pig race?

So,

50 is the cost of the bet

Thus,

Expected gain = 200 * 1/10 + 50 * 1/8 + 20 * 1/8 - 50

So,

Expected gain = -21.25

So, overall loss.

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