Construct the probability distribution representing

Reference no: EM13761069

There is a game called Under-or-Over Seven. A pair of fair dice is rolled once and the resulting sum determines whether the player wins or loses his or her bet. For example, the player can bet $1 that the sum will be under 7 -- that is 2, 3, 4, 5, or 6. For this bet, the player wins $1 if the result is under 7 and loses $1 if the outcome equals to or is greater than 7. Similarly, the player can bet $1 that the sum will be over 7 -- that is 8, 9, 10, 11, or 12. Here the player wins $1 if the result is over 7, but loses $1 if the outcome is 7 or under. A third method of play is to bet $1 on the outcome 7. For this bet, the player wins $4 if the result of the roll is 7 and loses $1 otherwise.

a) Construct the probability distribution representing the different outcomes that are possible for a $1 bet on under 7.

b) Construct the probability distribution representing the different outcomes that are possible for a $1 bet on over 7.

c) Construct the probability distribution representing the different outcomes that are possible for a $1 bet on 7.

d) Show that the expected long run profit (or loss) to the player is the same, no matter which method of play is used.

Reference no: EM13761069

Questions Cloud

Write a paper on healthy and productive lives of children : Write a paper on healthy and productive lives of children. Analyze and discuss one view of "living in a diverse world" and how it can apply to your work with young children.

Effective rate earned on the investments portfolio : A. What is the annual effective rate earned on the investments portfolio?B. What rate of return would you have calculated if one only looked at the ending portfolio value as compared with the beginning $1,000,000 investments?

Various forms of penalties : Analyze the various forms of penalties that occur as a result of tax evasion. Share your opinion on these penalties. Recommend a way in which to reduce the occurrences of tax evasion in the U.S.

Introducing and prioritizing a portfolio of it projects : Write a 4- to 5-page paper, introducing and prioritizing a portfolio of IT projects. This is an opportunity for you to be creative in this assignment

Construct the probability distribution representing : a) Construct the probability distribution representing the different outcomes that are possible for a $1 bet on under 7.b) Construct the probability distribution representing the different outcomes that are possible for a $1 bet on over 7.

Competitors or industry average : What is the company's ROA compared to its competitors or industry average? Is it getting better or worse over time?

Forecasted addition to retained earnings : The company's interest expense is expected to remain at $150 million, and the tax rate will remain at 40 percent. The company plans to pay out 70 percent of its net income as dividends, the other 30 percent will be additions to retained earnings. ..

Compare the prices of sleeping and napping bonds : Compare the prices of sleeping and napping bonds at the initial interest rate of 7.55%.why are they same

Article on current events within native american communities : Select an article on current events within Native American communities. Analyze and describe the article and provide a proper citation. Connect the article to an historic issue that we have covered during the course.

User Account

All Pages