Suppose that you roll two dice. You will be paid $ $10$ if you roll a double. You will not receive anything for any other outcome. How much should you be willing to pay for the privilege of rolling the dice, to the nearest cent?
A) $2.87
B) $2.47
C) $3.27
D) $2.07
E) $1.67

Question

Quizplus · Accepted Answer

The probability of rolling a double with two dice is 1/6. The expected value of the payout is (1/6) * $10 = $1.67. Therefore, you should be willing to pay $1.67 for the privilege of rolling the dice.

Suppose That You Roll Two Dice 101010 If You Roll a Double

Suppose That You Roll Two Dice $10$ If You Roll a Double