Please i need helpThank you **Problem 8.**Consider the following game: by betting 1 dollar, you have a 35% chance of winning the game which gives you a reward of $2.50. Also, assume you have a 15% chance to neither win nor lose any money (i.e., your $1 is returned) and assume that you have a 50% of losing the game (i.e., you lose your original dollar). Draw a probability tree and calculate the expectation of this game.Would you play it? What would happen to your stash if you played the game a whole bunch of times (i.e., if you had enough money to play the game 1 million times)?

Name: Please i need helpThank you **Problem 8.**Consider the following game:
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Description: Please i need helpThank you **Problem 8.**Consider the following game: by betting 1 dollar, you have a 35% chance of winning the game which gives you a reward of $2.50. Also, assume you have a 15% chance to neither win nor lose any money (i.e., your

Answered: Draw a probability tree and calculate…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Please i need help

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**Problem 8.**

Consider the following game: by betting 1 dollar, you have a 35% chance of winning the game which gives you a reward of $2.50. Also, assume you have a 15% chance to neither win nor lose any money (i.e., your $1 is returned) and assume that you have a 50% of losing the game (i.e., you lose your original dollar). Draw a probability tree and calculate the expectation of this game.

Would you play it? What would happen to your stash if you played the game a whole bunch of times (i.e., if you had enough money to play the game 1 million times)?

Expert Solution

Step 1

Given information

Given that, one have betted one dollar and there are total three possibilities

First, he will win the game with probability 0.35 and get the reward of $2.50

Secondly, he will neither win nor lose the game, this lead to getting one dollar return back with probability 0.15

third, he will lose the game entirely and get nothing with probability 0.50.

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