At a casino in Las Vegas, you are considering placing a bet either the number 7 in roulette or on the “pass line” in the dice game of craps.   a) If you bet $5 on the number 7 in roulette, the probability of losing $5 is 37/38 and the probability of making a net gain of $175 is 1/38. Find your expected value if you make this bet.   b) If you bet $5 on the pass line in the dice game of craps, the probability of losing $5 is 251/495 and the probability of winning $5 is 244/495. Find your expected value if you make this bet.   c) Which bet is better? Why?

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At a casino in Las Vegas, you are considering placing a bet either the number 7 in roulette or on the “pass line” in the dice game of craps.

 

a) If you bet $5 on the number 7 in roulette, the probability of losing $5 is 37/38 and the probability of making a net gain of $175 is 1/38. Find your expected value if you make this bet.

 

b) If you bet $5 on the pass line in the dice game of craps, the probability of losing $5 is 251/495 and the probability of winning $5 is 244/495. Find your expected value if you make this bet.

 

c) Which bet is better? Why?

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