Intro Stats, Section 1 Evilone bontempo | 2/27/18 10:24 PM Homework: Section 5.1

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Intro Stats, Section 1 Evilone bontempo | 2/27/18 10:24 PM Homework: Section 5.1 Save HW Score: 61.11%, 5.5 of 9 pts Score: 0 of 1 pt 8019(6 complete) 5.1.28 Question Help When playing roulette at a casino, a gambler is trying to decide whether to bet $15 on the number 33 or to bet $15 that the outcome is any one of the three possibilities 00, 0, or 1. The gambler knows that the expected value of the $15 bet for a single number is -0.79e. For the $15 bet that 35 the outcome is 00, 0, or 1, there is a probability of 3g of making a net profit of $45 and a 38 probability of losing $15. a. Find the expected value for the $15 bet that the outcome is 00, 0, or 1 b. Which bet is better: a $15 bet on the number 33 or a $15 bet that the outcome is any one of the numbers 00, 0, or 1? Why? a. The expected value is $ 14 (Round to the nearest cent as needed.) part Clear All

Explanation / Answer

a. Expected value of making a bet on {00,0 or 1} = (3/38)*45 + (35/38)*(-15) = -10.26 $

b. As -0.79 c > -10.26 $, gambler should bet on single number 33.

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