Stats Solutions

[See Solution] There are four outcomes of a simple game that cost $1 to play. The player can lose his $1 bet, he can keep the $1 bet and win nothing for

Question: (10pts) There are four outcomes of a simple game that cost $1 to play. The player can lose his $1 bet, he can keep the $1 bet and win nothing for a net gain of zero, or he can keep the $1 bet and win an additional $1 or an additional $10. The net winning is listed as X and its associated probabilities are listed below. The outcome of each game is independent.

X -1 0 1 10
P(X) 40% 39% 20% 1%
  1. What is E(X)?
  2. What is the standard deviation of X?
  3. If you play the game above once, what is the probability that you will lose money?
  4. If you play the game twice, what is the probability that you will lose money?
  5. If you play the game 1000 times, what is the probability that you will lose money? Hint: You will lose money if your average loss on 1000 games is negative. Estimate the probability the average winning on 1000 games is negative by using the distribution of the sample mean.

Price: $2.99
Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document


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