When playing roulette at a casino, a gambler is trying to decide whether to bet

Question

When playing roulette at a casino, a gambler is trying to decide whether to bet S15 on the number 17 or to bet $15 that the outcome is any ane of the five possibilities 00, , 1, 2 or3 The gambler knows that the expected value of the $15 het for a singl is -079e For the S15 bet that the outcome is 00,1, 2, or 3, there is a probability ofmaking a net profit of 90 and prility of losing $15 a. Find the expected value for the $15 bet that the outcome is 00, 0, 1, 2, or 3. 39 b. Which bet is belter. a $15 bet on the umber 17 or a $15 bet that the cuttorie is any one of the numbers 00, 0, 1, 2, or 3? Why? a. The expected value is S Round to the nearest cent as needed) b. Since the expected value ol the bet on the number 17 is | than lhe expected value for the bet that the outcome is 00, 0, 1 2, or 3, the bet on is better

Explanation / Answer

Answer with explanation below:

a. For the expected value we find the weighted average of the probabilities and the gain or loss you will avail with the probabilities.

Hence, (5/38)*(90) + (33/38)*(-15) = -$1.184. So a loss of $1.184 is the expected result.

b. Since the expected value of the bet on the number 17 is SMALLER ( it is .79) than the expected value for the bet that the outcome is 00,0,1,2,or 3 , the bet on 17 number is better

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