When playing roulette at a casino, a gambler is trying to decide whether to bet $20 on the number 37 or to bet $20 that the outcome is any one of the five 00, 0, 1, 2, or 3.  The gambler knows that the expected value of the $20 for a single number is -$2.10.  For the $20 bet that the outcome is 00, 0, 1, 2, or 3 is the probability of 5/38 or making a net profit of $1000 and a 33/38 probability of losing $20. Find the expected value for the $20 bet that the outcome is 00, 0, 1, 2, or 3. Which bet is better: a $20 bet on the number 37 or a $20 bet that the outcome is any one of the numbers 00, 0, 1, 2 or 3? why

A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
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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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When playing roulette at a casino, a gambler is trying to decide whether to bet $20 on the number 37 or to bet $20 that the outcome is any one of the five 00, 0, 1, 2, or 3.  The gambler knows that the expected value of the $20 for a single number is -$2.10.  For the $20 bet that the outcome is 00, 0, 1, 2, or 3 is the probability of 5/38 or making a net profit of $1000 and a 33/38 probability of losing $20.

Find the expected value for the $20 bet that the outcome is 00, 0, 1, 2, or 3.

Which bet is better: a $20 bet on the number 37 or a $20 bet that the outcome is any one of the numbers 00, 0, 1, 2 or 3? why?

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