Multiplier making a stop-anytime die game fair
Question
You start with $1. Each time you roll a die and it is not a , your stake is multiplied by ; if it is a , you lose everything. You may quit whenever you like and keep your current stake. For what is your expected payout the same no matter how many rolls you decide to make?
Short answer
. After committing to rolls the expected payout is . This is constant (equal to the starting $1) for all exactly when .
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Open the worked solutionLessons behind this question
- Expectation, Mean, and Variance
- Counting and Combinatorics
- Conditional Expectation and Variance Revisited
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