Chapter 5
discrete probability distributions
lity of losing $5 and you
the prize is $180, includin
roulette wo you have in of $175. utcome is an odd number,
imber 7 in. of making if you bet,
of making a net gain of $5 is
$10 that includes your
17. expected value in roulette when you give the venetian casino in las
bet on the number 7 in roulette, you have a 37/38 probability of lo
have a 1/38 probability of making a net gain of $175. (the prize is
your $5 bet, so the net gain is $175.) if you bet $5 that the outcome
the probability of losing $5 is 20/38 and the probability of making
18/38. (if you bet $5 on an odd number and win, you are given $10 that
bet, so the net gain is $5.)
a. if you bet $5 on the number 7, what is your expected value?
b. if you bet $5 that the outcome is an odd number, what is your expect
c. which of these options is best: bet on 7, bet on an odd number
or what is your expected value?
odd number, or don't bet?
why?