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At the races, your horse, Desert Tulip, has a probability of 1/20 of coming 1st, 1/10 of coming 2nd and a probability of 4 in coming 3rd. First place pays $22,000 to the winner, second place $18,000 and third place $7,400. Hence, is it worth entering the race if it costs $4,400?

At the races, your horse, Desert Tulip, has a probability of 1/20 of coming 1st, 1/10 of coming 2nd and a probability of 4 in coming 3rd. First place pays $22,000 to the winner, second place $18,000 and third place $7,400. Hence, is it worth entering the race if it costs $4,400?

A First Course in Probability (10th Edition)
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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d) At the races, your horse, Desert Tulip, has a probability of 1/20 of coming 1st, 1/10 of coming 2nd and a probability of 4 in coming 3rd. First place pays $22,000 to the winner, second place $18,000 and third place $7,400. Hence, is it worth entering the race if it costs $4,400? e) Your company plans to invest in a particular project. There is a 40% chance you will lose $5,500, a 45% chance you will break even, and a 15% chance you will make $10,000. Based solely on this information, what should you do?
Transcribed Image Text:d) At the races, your horse, Desert Tulip, has a probability of 1/20 of coming 1st, 1/10 of coming 2nd and a probability of 4 in coming 3rd. First place pays $22,000 to the winner, second place $18,000 and third place $7,400. Hence, is it worth entering the race if it costs $4,400? e) Your company plans to invest in a particular project. There is a 40% chance you will lose $5,500, a 45% chance you will break even, and a 15% chance you will make $10,000. Based solely on this information, what should you do?
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