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Answer: the expected value of Tom's payoff is m²
Step-by-step explanation:
Given the data in the question,
E[x] = mp
where p = 1/2
Now Tom gets payoff pounds until a tail first appears = 2m pounds
so
E[x] = m × 1/2 × 2m
E[x] = m²
Therefore the expected value of Tom's payoff is m²