1f(x) == 1{0.2 ≤ x ≤ 1}5xHere's the game. At the start you choose your level of risk x―itcould be anywhere between 0.2 and 1. Following that, a randomnumber z is generated between 0 and 1. If z is greater than orequal to x, you win, and receive a payoff of f(x). If z is less than x,you lose, and receive a payoff of 0.(a) Use calculus to find the value of x that maximizes your averagepayoff.-0.8-0.6-0:4-0.20.20.40.6 0.8

Step 1: Define the Expected PayoffThe random number z is uniformly distributed between 0 and 1, so…

Answered: 1 f(x) = = 1 {0.2 ≤ x ≤ 1} 5x Here's…

College Algebra (MindTap Course List)

12th Edition

ISBN:9781305652231

Author:R. David Gustafson, Jeff Hughes

Publisher:R. David Gustafson, Jeff Hughes

Chapter8: Sequences, Series, And Probability

Section8.7: Probability

Problem 39E: Assume that the probability that an airplane engine will fail during a torture test is 12and that...

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