probability
Message posted by Donna (via 64.12.105.172) on October 30, 2001 at 11:25 AM (ET)

#1.
When you give a casino $5 for a bet on the number 7 in roulette, you have a 1/38 probability of winning $175 and a 37/38 probability of losing $5. If you bet $5 that the outcome is an odd number, the probability of winning $5 is 18/38, and the probability of losing $5 is 20/38.
a)If you bet $5 on the number 7, what is your expected value?
b) If you bet $5 on the outcome that is an odd number, what is your expected value?
c) Which of these options is best; bet on 7, bet on odd, or don't bet? Why?

#2.
Identify whether the following are probability distributions or not. If not, identify which of the conditions is violated.

a) to settle a paternity suit, two different people are given blood tests. If x is the number having group A blood, then x can be 0, 1, or 2, and the corresponding probabilities are .36, .48, and .16, respectively.
b)Define P(x)=x/5 (where x can take in the values of 0,1,2,3).

Thank you SO much for all of your help. You don't know how much this is appreciated. Feel free to e-mail me back the answers instead of posting them on here, Imming me on AOL or whatever.
AOL SN: ButterCupChik26
E-mail: ButterCupChik26@aol.com

Thanks! Donna

READERS RESPOND:
(In chronological order. Most recent at the bottom.)

Re: probability
Message posted by Tomi (via 154.32.142.161) on October 30, 2001 at 6:12 PM (ET)

Expected value of X = sum (possible values of X * probability of those values occurring)

a) Expected gain = 175*1/38 + (-5)*37/38 = (175-185)/38 = -10/38

b) Expected gain = 5*18/38 + (-5)*20/38 = (90-100)/38 = -10/38

c) Not betting costs you nothing, but betting will cost you. Best action: don't bet!

2.

a) This is OK - probabilities add up to 1.

b) P(X=0)=0, P(X=1)=0.2, P(X=2)=0.4, P(X=3)=0.6
Probabilities add up to 1.2 - impossible, therefore not OK.

Re: probability
Message posted by Donna (via 64.12.106.26) on October 30, 2001 at 7:31 PM (ET)