Dud Bolt is preparing for the Boonta Eve Classic speeder race and has to make a decision about which racer to bet on. He has calculated his potential payoffs and narrowed it down to two racers shown in the following table:
Racer Finishes First Finishes Second Finishes Third
Anakin Skywalker $30 $10 -$5
Aldar Beedo $20 $8 -$3
The probability that Anakin finishes first is 55%, that he finishes second is 30% and 15% that he finishes third. For Aldar Beedo, there is a 25% probability that he finishes first, a 40% probability that he comes in second and 35% probability that he finishes third. Based on this information:
- What is Dud's expected return if he places a $10 bet on Anakin?
- What is Dud's expected return if he places a $15 bet on Aldar?