Need economics help with to play using a dice

User Generated

XunagXb

Economics

Description

You are invited to participate in the following game, which is played with one die. Assume the die to be fair.
The rules are as follow: Investment is 100 THB. If you roll a 1,2,3 or 4 you lose your investment. If you roll a 5, i will pay you 150 THB. If you roll a 6, I will pay you 500 THB.

Should you participate in this game? Why/why not?
Hint: Use the expected value to determine whether or not this is a good investment.

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Explanation & Answer


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