Hi,Where does the -0.9975 (5) come from and how is the ending answer: =1.925-4.9875 = -3.06?Thank you :) The probability distribution for the possible gainsis calculated as follows:Gain (x)$2,000 $1,000 $500 $250 $100-$5Probability P(x)Also, -$5 represents the loss of buying a ticket; the others are prize money won from buying a ticket.The expected value is calculated as follows:E (x) = x- P(x)$2,000 2,000+ $1,000 2,000 + $500-$100-=1,9952,000 2,000 2,000 2,000 2,000 2,000--$51.9952,0002,000=+$250 2,000 +2,000= 1 + 0.5 +0.25 +0.125 + 0.05 - 0.9975 (5)1.925 - 4.9875= -3.06Thus, the expected value for buying a ticket worth $5 is -$3.06.Conclusion:If a person buys one ticket worth $5, then the person is expected to lose approximately $4. This is becausethe expected value for buying a ticket worth $5 is negative.

The expected value technique in statistical learning can be used to get the estimated return of a…

Answered: Hi, Where does the -0.9975 (5) come…

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...

See similar textbooks

Related questions

Question

Hi,

Where does the -0.9975 (5) come from and how is the ending answer: =1.925-4.9875 = -3.06?

Thank you :)

The probability distribution for the possible gainsis calculated as follows:
Gain (x)
$2,000 $1,000 $500 $250 $100-$5
Probability P(x)
Also, -$5 represents the loss of buying a ticket; the others are prize money won from buying a ticket.
The expected value is calculated as follows:
E (x) = x- P(x)
$2,000 2,000+ $1,000 2,000 + $500-
$100-
=
1,995
2,000 2,000 2,000 2,000 2,000 2,000
-
-$51.995
2,000
2,000
=
+$250 2,000 +
2,000
= 1 + 0.5 +0.25 +0.125 + 0.05 - 0.9975 (5)
1.925 - 4.9875
= -3.06
Thus, the expected value for buying a ticket worth $5 is -$3.06.
Conclusion:
If a person buys one ticket worth $5, then the person is expected to lose approximately $4. This is because
the expected value for buying a ticket worth $5 is negative.

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

I see how you got- 3.0625 loss per ticket, however where are you getting 4.9875 from? I took each dollar amount for example $2000 times 1 divide into 2000 and I did this with the remaining cash values of 1000, 500, 250, 100 and - 5 for which they are divided with the denominator of 2000.

When I add up the figures from $2000 all the way to $100 it equals 1.925. None of my calculations show 4.9875 where is this particular figure coming from? Thank you.

I end up with 1.925 with a negative 0.9975 but nowhere am I getting the amount of 4.9875 no matter how many times I've tried. Could you please show where this figure is coming from for the final answer on this solution. Thank you.

Solution

by Bartleby Expert

SEE SOLUTION