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iceblits
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Homework Statement
A bookie will pay you 6$ for every 1$ bet if you correctly select the winners (adjusted by a spread) in three games. What is the bookies expected earnings? (spread is how much the team wins by, and, when added to the underdog's score, should result in a tie)
Homework Equations
E[x]=sum(x*f(x))
The Attempt at a Solution
I'm having trouble getting started and making a probability density function for this because I don't really know how to deal with "the spread". If there was no spread would the pdf look like this?:
X=number of winners selected...money earned by bookie...probability
0.......... $3........ 1/8
1.......... $-3......3/8
2.......... $-9......3/8
3...........$-15......1/8
and then his expected earnings for this would be 3*(18)+(-3)*(3/8)+(-9)*(3/8)+(-15)*(1/8)