Suppose Chris is offered the following gamble: with probability 0.1 he will win $90, with probability 0.4 he will win $50, and with probability 0.5 he will lose $60. The expected value of this gamble is found by solving:
A. 0.1 × $90 + 0.4 × $50
B. 0.1 × $90 + 0.4 × $50 - 0.5 × $60
C. ($90 + $50 - $60)/3
D. 0.1 × ($90 - $60) + 0.4 × ($50 - $60)
Answer: B
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