Die game that banks on four or five, busts on six
Question
You roll a fair die repeatedly. Each roll of , or adds one point to your score and you roll again. The first time a , or appears the game ends: on a or you are paid your accumulated score in dollars, and on a you get nothing. What is the expected payout?
Short answer
of a dollar. The number of low rolls before stopping is geometric with mean (each roll is low with probability ). The stopping face is independent of that count and is a or with probability , so the expected payout is .
Adapted from Crack, Heard on the Street, Q4.33, p.43; question and answer rewritten by SelfMadeQuant.com.
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Open the worked solutionLessons behind this question
- Conditional Expectation and Variance Revisited
- Counting and Combinatorics
- Expectation, Mean, and Variance
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