Solve the mean and variation of a gambling game where it is possible to lose 500, break even, win 400, or win 700 each time plays.

Question

Kindly illustrate the answer clearly with full information how to get the answer. Thankyou and God bless!

Answer 1

We need the mean of -500, 0, 400, 700. The mean is the sum divided by 4: 600/4=150.

The variance (variation) is obtained by averaging the sum the squares of the differences between these and the mean:

(650^2+150^2+250^2+550^2)/4=202500. The standard deviation is the square root of this=450.