Win on primes, lose half on composites from 2 to 10
Question
An integer is drawn uniformly from . If is prime you win dollars; if is composite you lose dollars. What is the most you should pay to play? Answer if you would decline to play.
Short answer
. The primes contribute and the composites contribute , so the expected value is dollar. A game with negative expectation is not worth any entry fee, so you should not play.
Adapted from QuantQuestions.io; question and answer rewritten by SelfMadeQuant.com.
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Open the worked solutionLessons behind this question
- Expectation, Mean, and Variance
- Conditional Expectation and Variance Revisited
- Continuous Random Variables and Probability Density Functions
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