Long term expected value

J

jh104

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Aug 27, 2020
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Hi all,

I'm new here and not very good at math at all, hopefully i can get some help with this.

15 people play a game and pay £1, all have an equal chance of winning £20 (1 person wins per game.) So each time the 15 people play they have an expected value of +0.25

Can someone give me some examples on the sort of swings to be expected here, after 100 games what is the chances of being down money? Or whats the chances of losing over lets say, £300?

Thanks
 
jh104 said:
Hi all,

I'm new here and not very good at math at all, hopefully i can get some help with this.

15 people play a game and pay £1, all have an equal chance of winning £20 (1 person wins per game.) So each time the 15 people play they have an expected value of +0.25

Can someone give me some examples on the sort of swings to be expected here, after 100 games what is the chances of being down money? Or whats the chances of losing over lets say, £300?

Thanks
Click to expand...
Is it a problem that you have been assigned to solve in a course?
 
jh104 said:
Hi all,

I'm new here and not very good at math at all, hopefully i can get some help with this.

15 people play a game and pay £1, all have an equal chance of winning £20 (1 person wins per game.) So each time the 15 people play they have an expected value of +0.25

Can someone give me some examples on the sort of swings to be expected here, after 100 games what is the chances of being down money? Or whats the chances of losing over lets say, £300?

Thanks
Click to expand...
Can you tell us how you computed the expected value to be .25£ ??
 
On average after 15 games you will lose $1 14 times and win $20 1 time. So how much do you expect to win after 15 games? Now how much after 1 game?
 
Jomo said:
On average after 15 games you will lose $1 14 times and win $20 1 time. So how much do you expect to win after 15 games? Now how much after 1 game?
Click to expand...

Ah ok, so I expect to win $6 after 15 games then its $6 divided by 15 which is .4?
 
jh104 said:
Ah ok, so I expect to win $6 after 15 games then its $6 divided by 15 which is .4?
Click to expand...
Yes of course!
Now let's look at being down after 100 games? How many of the games can you win and be down after 100 game. Please give me all the possibilities! For example if you win 0 game in 100 then you will be down. So include 0 in your answer.
 
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