3. A risk-averse individual is offered a choice between a gamble thatpays P1000 with a probability of 25% and P100 with a probability of75%, or a payment of P325. Which would he choose?

Expected value is the measure that explain the average value. It is calculated by the combined value…

Answered: 3. A risk-averse individual is offered…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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Suppose you are deciding whether or not to bring an umbrella to school and the weathercan be either sunny or rainy. Initially, you think the probability that it will be sunny isP (S) = 0.6, and the probability that it will be rainy is P (R) = 0.4. If you bring an umbrellaand it rains, your payoff is 6. If you bring an umbrella and it is sunny, your payoff is 9. Ifyou don’t bring an umbrella and it rains, your payoff is 0. If you don’t bring an umbrellaand it is sunny, your payoff is 10. Suppose that you check two websites for weather forecasts.You know that the two forecasts are independent of each other, and each forecast is correct70% of the time. That is, the probability that the website says it will be sunny given that itactually will be sunny is 0.7, and the probability that the website says it will rain given thatit actually will rain is 0.7. Suppose that you suffer from confirmation bias. You initially thinkit is more likely to be sunny, so you misinterpret rain forecasts as sun…
You purchase a brand new car for $15,000 and insure it. The policy pays 78% of the car's value if there is an issue with the engine or 30% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.009, and the probability there is an issue with the speaker system is 0.02. The premium for the policy is p. Let X be the insurance company's net gain from this policy. (a) Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. P(X) (b) Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent
An urn contains 2 one-dollar bills, 1 five-dollar bill and 1 ten-dollar bill. A player draws bills one at a time without replacement from the urn until a ten-dollar bill is drawn. Then the game stops. All bills are kept by the player. Determine: (A) The probability of winning $11. (B) The probability of winning all bills in the urn. (C) The probability of the game stopping at the second draw. iew an example Get more help. (A) What is the probability of winning $11? (Type a decimal or a fraction. Simplify your answer.) Resume F11 Backspace F12 Print Screen Insert Scre Lock D Home M Delete End Pase Break Page Up A DALL Page Num Lock 11 ... (102 Co. Logitech Clear all Kviewed G Check answer lect: D
Friskie is having her fifth litter. The prior litters have either been three normal pups or two normal pups and a runt. Assume the probability of either outcome is 50%.
2. You play a game in which 40% of the time you win $3 and 40% of the time you lose $5 and 20% of the time you win $1. Please show your work.
2. Wallace figures his chances of getting a new car for graduation at 70% if he graduates as class valedictorian. He only has about a 25% chance of getting a new car if he graduates 2nd or lower. He estimates his chances of being valedictorian at 50/50. What is the likelihood that Wallace will get a new car?
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3. A risk-averse individual is offered a choice between a gamble that pays P1000 with a probability of 25% and P100 with a probability of 75%, or a payment of P325. Which would he choose?