2. Poisson Random Variable: Suppose that during the regular baseball season, the

Question

2. Poisson Random Variable: Suppose that during the regular baseball season, the Miami Marlins hit an average of 2 home runs per game. During the post-season, the Miami Marlins hit an average of 2.25 home runs per game. Suppose you lose $25 if the Marlins score zero home runs and win $X if they score at least one home run. Compute the minimum value of X so that you would accept this bet during a regular-season baseball game. Compute the minimum value of X so that you would accept this bet during a post-season baseball game a. b.

Explanation / Answer

a)

P(0 home runs during regular season) = 0.13534

x*(1-0.13534)-25*0.13534 = 0

X = $2.95

b)

P(0 home runs during post-season) = 0.10540

x*(1-0.10540)-25*0.10540 = 0

X = $3.91

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.