This document describes a game where players pay $1 to play and can win $5, $3, or $2 for landing on red, blue, or yellow respectively, with no winnings for white. Red has a 2% chance, blue 4%, yellow 16%, and white 78%. To determine if the game favors the player or owner, one must calculate the expected value of winnings.

1. A game is said to be "fair" if the expected value for winnings is 0, that is, in the long run, the
player can expect to win 0. Consider the following game. The game costs $1 to play and the
winnings are $5 for red, $3 for blue, $2 for yellow, and nothing for white. The following
probabilities apply. What are your expected winnings? Does the game favor the player or the
owner? Outcome Probability Red .02 Blue .04 Yellow .16 White .78