A game costs 5 to play. A player wins 20 with probability 0.15, and otherwise wins nothing. What is the expected net gain or loss per game?

Expected winnings are the prize times its probability: $0.15 \times 20 = 3$, so a player expects to win $3.00 per game. Subtract the $5 cost to play: $3 - 5 = -2$, an expected net loss of $2.00 per game, choice C. Choice D, $3.00, is the expected winnings before paying to play. Choice A, −$1.25, comes from a subtraction slip, and choice B, $1.25, also flips the sign into a gain. Because the expected value is negative, a player loses about $2.00 per game on average over many games.