Question

Asked Oct 29, 2019

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Step 1

X- be the winnings when we quit.

Case-1 win in first spin

Probability of win in first spin = 18/38

profit when you quit X = $1

Case-2 loss in first spin

probability of loss in first spin = 20/38

Possible outcomes in next two spins are (win, win), (win loss), (loss,win),(loss,loss)

probability of win in third spin and win in fourth spin= (18/38)(18/38)

profit when you quit X = -1+1+1 = 1

probability of win in third spin and loss in fourth spin= (18/38)(20/38)

profit when you quit = -1+1-1 = -1

probability of loss in third spin and win in fourth spin= (20/38)(18/38)

profit when you quit = -1-1+1 = -1

probability of loss in third spin and loss in fourth spin= (20/38)(20/38)

profit when you quit = -1-1-1 = -3

Possible outocmes of X are 1,1,-1,-1,-3 with probabilities as shown below

Step 2

P(X>0) is calculated as shown below,

we get P(X > 0) = 0.592 (rounded to three decimals).

Step 3

The probability of net profit greater than 0 is 0.592. If we consider this probability we can say that the chance to quit the roulette table with winning will be favourable as it is more than...

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