5-2 Beyond the Basics 23. Expected Value for the Texas Pick 3 Game In the Texas

Question

5-2 Beyond the Basics 23. Expected Value for the Texas Pick 3 Game In the Texas Pick 3 lottery, you can bet $1 by selecting three digits, each between 0 and 9 inclusive. If the same three numbers are drawn in the same order, you win and collect $500. a. How many different selections are possible? b. What is the probability of winning? c. If you win, what is your net profit? d. Find the expected value. e. Ifyou bet $1 on the pass line in the casino dice game of craps, the expected value is-1.4 Which bet is better: a $1 bet in the Texas Pick 3 game or a $1 bet on the pass line in craps? Explain.

Explanation / Answer

Total number of selections possible for 1 digit=10(0-9 inclusive)

a) total number of different selection=10*10*10=1000

b) probability of winning=1/1000=0.001

c) net profit= winning amount-betting amount=500-1$=499$

d) expected value= profit when winning*winning probability + profit when loosing*loosing probability

=499*0.001 + -1*(1-0.001)$

=0.499-0.999$

=-0.5$

e) Since the expected value of texas pick 3 game is more so we can say that texas pick 3 lottery game is better than pass the line in casino game of craps.

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

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