QUESTION 10You are offered the following bet Pay $20. Roll a six sided die. If you roll a six, win $200. else get nothing According to classical economics, do you play?Yes. Winning will create a $180 profit!No. You are more likely to lose money (5/6 of the time) than win money.O No. Most people are risk-averse and won't take the riskYes The expected value is $200/6-$33, which is more than the $20 to play

Initially we have to pay $20 to play the game. If we roll a six, winning amount is $200. If we…

Answered: QUESTION 10 You are offered the…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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A game costs $1 to play where you win $5 when a coin lands on heads but lose $6 when a coin lands on tails. Calculate the expected payoff to the nearest cent, being sure to show all work.
You are on a TV show. You have been asked to either play a dice game five times or accept a $120 bill. The dice game works like this: If you roll a 1 or 5, you win $50. If you roll a 4, you win $150. If you roll a 2, 3 or 6, you lose $30. Should you play the game? Answer yes or no. __________ Use expected values and decision theory to justify your answer. Please round the answer to two decimal places. Expected value of five games is $__________
You flip two fair coins. If both coins land heads you win $2. Otherwise you lose $1. What is the expectation of this game? Round your answer to the nearest cent.
Roulette: You bet on numbers 1-18. What's the likelihood of winning after one trial? Explain your answer.
A gambler uses theory to calculate the probability of winning a card game and gets P(winning) = 0.10. Which option best describes the meaning of this probability? A. He will win 10 times B. In the long run he will win approximately 10% of the time C. He will win on every 10th play D. He is guaranteed to win exactly 10% of the time
Activity #4: PROBABILITY Read and analyze the problems, show your solution, and box the answer. 1. What would be the probability of a. picking a black card at random from a standard deck of 52 cards? b. picking a face card (i.e. a king, queen, or jack)? c. not picking a face card? 2. What is the probability of rolling, on a fair dice: a. a 3? b. an even number? c. zero? d. a number greater than 4? e. a number lying between 0 and 72 f. a multiple of 3 given that an even number was drawn? 3. A standard deck of playing cards is well shuffled and from it, you are given two cards. You can have 0, 1, or 2 aces: three possibilities altogether. So, the probability that you have two aces is equal to 1/3. What is flawed about this argument? 4. You shuffle a deck of playing card, and then start turning the cards one at a time. The first one is black. The second one is also a black card. So is the third, and this happens up to the 10th card. You start thinking, "the next one will likely be red!"…
Your friend convinces you to play a game where you roll a standard die one time. It costs $5 to play the game. If you roll a 3 or a 4 you win $9. Any other roll wins nothing. 4. Find the expected value of this game.
It is the beginning of September and you have been offered the following deal to go heli-skiing. If you pick the first week in January and pay for your vacation now, you can get a week of heli-skiing for $2,900. However, if you cannot ski because the helicopters cannot fly due to bad weather, there is no snow, or you get sick, you do not get a refund. There is a 30% probability that you will not be able to ski. If you wait until the last minute and go only if you know that the conditions are perfect and you are well, the vacation will cost you $4,600. You estimate that the pleasure you get from heli-skiing is worth $6,700 per week to you (if you had to pay more than that, you would choose not to go). If your cost of capital is 11% per year, should you book ahead or wait? You should because the NPV of this choice is $ book ahead wait (Round to two decimal places.)
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Solve the problem. The table below shows the probabilities of a person accumulating specific amounts of credit card charges over a 12-month period. Find the probability that a person's total charges during the period are less than $400. Charges Under $100 Probability 0.48 $100-$399 0.33 $400-$999 0.14 $1000 or more 0.05 O 0.48 O 0.81 O 0.95 O 0.33 ASUS f5 E3 f6 f7 f8 f10 & 4. 5 6 7 8. 9- 61
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