Elementary Statistics (12th Edition)

Published by Pearson
ISBN 10: 0321836960
ISBN 13: 978-0-32183-696-0

Chapter 5 - Discrete Probability Distributions - 5-2 Probability Distributions - Beyond the Basics: 24

Answer

a)10000 ways b)\frac{1}{10000} c)4999 d)-50 cents e)Neither of them is better.

Work Step by Step

a) In each selection there are 10 ways to select, threfore the number of selections: $10\cdot 10 \cdot 10 \cdot 10=10000$ ways. b) Out of the 1000 possibilities 1 possibility would win us the prize therefore the probability is:$\frac{1}{10000}$. c)net profit=winning-bet=5000-1=4999 d) Expected value: $5000\cdot\frac{1}{10000}+(-1)\cdot \frac{10000}{10000}=0.5-1=-0.5=-50 cents$ e)Both have the expected value of -50 cents, therefore betting on neither of them is better.
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