Asked by Lucretia Juarez on Sep 24, 2024
Verified
At a fair carnival roulette wheel,a player can either win $10,$30,or $80.If it costs $50 to play,would an individual gain or lose from playing the game
A) Gain
B) Lose
C) Breakeven-neither gain nor lose
D) None of the above
Cost to Play
The initial investment or expense required to enter a market, participate in a game, or start a new venture.
Gain
An increase in a resource or asset, often measured in financial terms, resulting from investment or business operations.
Lose
To be deprived of or fail to keep possession of something or someone, typically in a competitive scenario or due to carelessness.
- Analyze the justice of games and financial ventures through their projected returns.
Verified Answer
CP
Cheryl Pascale3 days ago
Final Answer :
B
Explanation :
There are three possible outcomes for the roulette wheel, with probabilities of 1/3 each. The expected value of each spin is calculated as:
E(win) = (1/3)($10) + (1/3)($30) + (1/3)($80) = $40/3
Since it costs $50 to play, the player can expect to lose an average of $50 - $40/3 = $10/3 per spin. Therefore, the best choice is not to play, as the player will lose money on average.
E(win) = (1/3)($10) + (1/3)($30) + (1/3)($80) = $40/3
Since it costs $50 to play, the player can expect to lose an average of $50 - $40/3 = $10/3 per spin. Therefore, the best choice is not to play, as the player will lose money on average.
Learning Objectives
- Analyze the justice of games and financial ventures through their projected returns.
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