CFA Practice Question

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CFA Practice Question

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?

A. $0.35
B. $1.25
C. $0.05
Correct Answer: C

Expected gain: 5 x (1/10) + 1 x (3/10) + 0 x (6/10) = $0.8
Net gain: $0.8 - 0.75 = $0.05

User Contributed Comments 2

User Comment
wundac much more logical with real numbers
khalifa92 then read the example in LOS
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