Consider the following game: by betting 1 dollar, you have a 35% chance of winning the game which gives you a reward of $2.50. Also, assume you have a 15% chance to neither win nor lose any money (i.e., your $1 is returned) and assume that you have a 50% of losing the game (i.e., you lose your original dollar). Draw a probability tree and calculate the expectation of this game. Would you play it? What would happen to your stash if you played the game a whole bunch of times (i.e., if you had enough money to play the game 1 million times)?
Consider the following game: by betting 1 dollar, you have a 35% chance of winning the game which gives you a reward of $2.50. Also, assume you have a 15% chance to neither win nor lose any money (i.e., your $1 is returned) and assume that you have a 50% of losing the game (i.e., you lose your original dollar). Draw a probability tree and calculate the expectation of this game. Would you play it? What would happen to your stash if you played the game a whole bunch of times (i.e., if you had enough money to play the game 1 million times)?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Consider the following game: by betting 1 dollar, you have a 35% chance of winning the game which gives you a reward of $2.50. Also, assume you have a 15% chance to neither win nor lose any money (i.e., your $1 is returned) and assume that you have a 50% of losing the game (i.e., you lose your original dollar). Draw a probability tree and calculate the expectation of this game. Would you play it? What would happen to your stash if you played the game a whole bunch of times (i.e., if you had enough money to play the game 1 million times)?
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