Find expected value when to pick four in quick draw game

Assignment Help Basic Statistics

Reference no: EM13151788

New York has a lottery game called Quick Draw, in which the player can pick anywhere from 1 up to 10 numbers from 1 to 80. The computer then picks 20 numbers, and how much you win is based on how many of your numbers match the computer's. For simplicity, we will only consider the two cases in which you pick 4 or 5 numbers. The payoffs for each dollar that you bet are given in the table below.

How Many Numbers Match the
Computer's Numbers
0 1 2 3 4 5
You Pick 4 0 0 1 5 55
You Pick 5 0 0 0 2 20 300

a. According to the Quick Draw playing card, the "Overall Chances of Winning" when you pick 4 are "1:3.86," while the chances when you pick 5 are "1:10.34." Verify these figures.

b. Find the expected value when you pick 4 and when you pick 5, betting $1 each time.

c. Based on your results from parts a and b, are you better off picking 4 numbers or picking 5? Explain your reasoning.

Reference no: EM13151788

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