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Betting 20 dollars on a number across three dice

Question

In a casino game you stake money on one number from 11 to 66, and then three fair dice are thrown. If your number shows on exactly one, two or three of the dice, you get your stake back plus one, two or three times the stake respectively; if it shows on none of the dice, the stake is lost. With a stake of $20, what is your expected profit from one play?

Short answer

−8554-\tfrac{85}{54} dollars, about −$1.57-\text{\char36}1.57. The number of matches is Bin(3,16)\text{Bin}(3,\tfrac16), with probabilities 125216,75216,15216,1216\tfrac{125}{216},\tfrac{75}{216},\tfrac{15}{216},\tfrac1{216} for 0,1,2,30,1,2,3 matches. The expected profit per unit stake is −125+75+30+3216=−17216\tfrac{-125+75+30+3}{216}=-\tfrac{17}{216}, and multiplying by 2020 gives −8554-\tfrac{85}{54}.

Adapted from QuantQuestions.io; question and answer rewritten by SelfMadeQuant.com.

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