1. A person must pay $$9 to play a certain game at the casino. Each player has a probability of 0.01 of winning $$13, for a net gain of $$4 (the net gain is the amount won 13 minus the cost of playing 9). Each player has a probability of 0.99 of losing the game, for a net loss of $$9 (the net loss is simply the cost of playing since nothing else is lost). What is the Expected Value of this event? If the Expected Value is negative, be sure to include the "-" sign with the answer. Express the answer with two decimal places. Expected Value = $ If a person plays this game a very large number of times over the years, do we expect him/her to come out financially ahead or behind?

• behind
• ahead

2. A life-insurance company sells a $300,000 1-year term life insurance policy to a 20-year-old individual for $250. According to the National Vital Statistics Report, the probability that the individual survives the year is 0.999544.

	x=$ money to insurance company	P(x)
Individual Lives
Individual Dies

a. Fill in the above table.

b. What is the expected value of this policy to the insurance company? $

c. Interpret the expected value. Select an answer

-the exact amount of money made on each policy.

-a positive value because it is a measure of value.

-the amount of money you lose when you buy this insurance policy.

-the average amount of money made per policy over a large number of policies.

3. In a lottery game, a player picks six numbers from 1 to 20. If the player matches all six numbers, they win 40,000 dollars. Otherwise, they lose $1. What is the expected value of this game? $