One option in a roulette game is to bet $24on red. (There are 18 red compartments, 18 black compartments, and two compartments that are neither red nor black.) If the ball lands on red, you get to keep the $24 you paid to play the game and you are awarded $24. If the ball lands elsewhere, you are awarded nothing and the $24 that you bet is collected. Find the expected payback for this roulette game if you bet $24 on red.

One option in a roulette game is to bet $24on red. (There are 18 red compartments, 18 black compartments, and two compartments that are neither red nor black.) If the ball lands on red, you get to keep the $24 you paid to play the game and you are awarded $24. If the ball lands elsewhere, you are awarded nothing and the $24 that you bet is collected. Find the expected payback for this roulette game if you bet $24 on red.

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 21P: In a certain state lottery, a lottery ticket costs 2. In terms of the decision to purchase or not to...

See similar textbooks

Similar questions

You're offered a game of chance. It costs $100 to play the game. The rules are as follows: If a coin flip (assume a fair coin), comes up heads, you'll win $170, but if the coin comes up tails, you leave with $89. What is the expected return on the gamble
Hanshaben
3. Which lottery payout scheme is better? Suppose you win a small lottery and have the choice of two ways to be paid: You can accept the money in a lump sum or in a series of payments over time. If you pick the lump sum, you get $2,950 today. If you pick payments over time, you get three payments: $1,000 today, $1,000 1 year from today, and $1,000 2 years from today. At an interest rate of 8% per year, the winner would be better off accepting the , since that choice has the greater present value. At an interest rate of 10% per year, the winner would be better off accepting , since it has the greater present value. Years after you win the lottery, a friend in another country calls to ask your advice. By wild coincidence, she has just won another lottery with the same payout schemes. She must make a quick decision about whether to collect her money under the lump sum or the payments over time. What is the best advice to give your friend? The lump sum is…
Mr. John is watching an old game show rerun on television called Let’s Make a Deal in which the contestant chooses a prize behind one of two curtains. One of the curtains will yield a gag prize worth Rs.14,700/-, and the other will give a car worth Rs. 63,600. The game show has placed a subliminal message on the curtain containing the gag prize, which makes the probability of choosing the gag prize equal to 60 percent. What is the expected value of the selection? (a) Rs. 24,260; (b) Rs. 34,260; (c) Rs. 43,620; (d) Rs. 32,620; (e) Rs. 26,420
You get to throw a bean bag at a cutout of Mrs. Reed’s face with holes for the eyes, nose and mouth. You have a 20% chance of throwing it in the eyes or nose. If you do, then you win $5. You have 30% chance of throwing it in the mouth. If you do, then you win $4. You have 50% chance of missing. If you miss, you lose $6. Find the expectation for this game.
The questions in this section contribute to your assignment grade. Stars indicate the difficulty of the questions, as described on Canvas. 2. Mark and Elyse buy a lottery ticket together. They win a promotion that guarantees them free apples for life. The apples can only be delivered to one recipient. Mark decides to buy Elyse out of her share of the win. That is: Mark will receive all the apples (for life) and Elyse will receive cash (once). The deliveries of apples are valued at $1000 per year. The friends consult an actuarial table, and decide that they both can reasonably be expected to live another 50 years. So, Elyse proposes that Mark pays her $25,000 for her half of the windfall. Mark, sensing an opportunity for calculus and for profit, declines her offer. He explains his objection: "If I pay you a dollar now, and get a dollar back 50 years later, that's not a good deal for me." Mark and Elyse agree on a future discounting rate of 10% per year. They calculate it as follows:¹ D…
In a certain state lottery, a lottery ticket costs 2. In terms of the decision to purchase or not to purchase a lottery ticket, suppose that the following payoff table applies: a. A realistic estimate of the chances of winning is 1 in 250,000. Use the expected value approach to recommend a decision. b. If a particular decision maker assigns an indifference probability of 0.000001 to the 0 payoff, would this individual purchase a lottery ticket? Use expected utility to justify your answer.
Read the passage and answer the following question(s). dis ins Homeowner and Renters Insurance: Protect Your Belongings You may be able to save hundreds of dollars a year on homeowners insurance by shopping around. You can also save money with these tips: Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium. Ask your insurance agent about discourks. You may be able to get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire retardant roofing material. Persons over 55 years of age or long-term customers may also be offered discounts. OD. Insure your house NOT the land under it. After a disaster, the land is still there. If you don't subtract the value of the land when deciding how much homeowners insurance to buy, you will pay more than you should. Don't wait till vou have lor
8 A company offers your friend, Lily, an interesting gamble involving giving her the choice of the contents in one of two sealed, identical-looking boxes. One box has $10,000 in cash and the second has nothing inside. There is an equal probability that the chosen box contains cash versus nothing. Lily states that she would not call off the gamble if you offered her a certain $2,999 instead of her choice of box. However, she would be indifferent if $3,000 was offered in place of the risky gamble; and she would definitely take $3,001 to call off the gamble. We would describe Lily as in this instance. I A. Having a risk preference B. Being risk indifferent C. Being risk averse D. Cannot decide G
Don't provide handwritten solution.
Please help me. Don't use any AI. It's strictly prohibited.
You purchased a new Beats headphone on sale for $200. Your grandma also bought one for you as a gift at the same price. Your friend offers to purchase the second headphone from you for $120. If you choose not to sell, the opportunity cost of keeping the second headphone Select one: O A. is $120. OB. cannot be determined without further information. OC. is zero OD. is $320. OE. is $80. AL 21 Time left 0:39:26