Consider a gambler who starts with an initial fortune of $1 and then on each successive gam- ble either wins $1 or loses $1 independent of the past with probabilities 0.45 and 0.55 respectively. The gambler's objective is to reach a total fortune of $10, without first getting ruined (running out of money). If the gambler succeeds, then the gambler is said to win the game. In any case, the gambler stops playing after winning or getting ruined, whichever happens first. What is the probabilty that the gambler wins

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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Consider a gambler who starts with an initial fortune of $1 and then on each successive gam-
ble either wins $1 or loses $1 independent of the past with probabilities 0.45 and 0.55 respectively. The
gambler's objective is to reach a total fortune of $10, without first getting ruined (running out of money).
If the gambler succeeds, then the gambler is said to win the game. In any case, the gambler stops playing
after winning or getting ruined, whichever happens first. What is the probabilty that the gambler wins
the game?
Transcribed Image Text:Consider a gambler who starts with an initial fortune of $1 and then on each successive gam- ble either wins $1 or loses $1 independent of the past with probabilities 0.45 and 0.55 respectively. The gambler's objective is to reach a total fortune of $10, without first getting ruined (running out of money). If the gambler succeeds, then the gambler is said to win the game. In any case, the gambler stops playing after winning or getting ruined, whichever happens first. What is the probabilty that the gambler wins the game?
Expert Solution
Step 1

From the given information,

The gambler starts with an initial fortune of $1.

The probability of winning $1 is 0.45 and the probability of losing $1 is 0.55.

The gambler’s objective is to reach a total fortune of $10.

Gambler should reach a total fortune of $10 without first getting ruined.

The probability of success,  p = 0.45.

The probability of failure,  q = 0.55.

 

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