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Basic Question 1 of 8
There are ten marbles in a box: one red, three yellow, and six blue. You pick one marble from the box for 75 cents. You win $5 if you pick a red marble, $1 if you pick a yellow marble, and nothing if you pick a blue marble. If you play the game once, what is your expected net gain?
B. $1.25
C. $0.05
A. $0.35
B. $1.25
C. $0.05
User Contributed Comments 2
User | Comment |
---|---|
wundac | much more logical with real numbers |
khalifa92 | then read the example in LOS |
Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
calculate and interpret the expected value, variance, and standard deviation of random variables;
explain the use of conditional expectation in investment applications;
interpret a probability tree and demonstrate its application to investment problems;
CFA® 2024 Level I Curriculum, Volume 1, Module 3.