Homework SourseStuck on this question 5 In a gambling game on every play th
Stuck on this question.
5. In a gambling game, on every play, there is a 0.1 probability that you win $7 and a 0.9 probability that you lose $1.
a) Draw the pmf (probability mass function?
b) What is the expected value of this game? Interpret in the context of the problem.
c) Find the standard deviation
Stuck on this question.
5. In a gambling game, on every play, there is a 0.1 probability that you win $7 and a 0.9 probability that you lose $1.
a) Draw the pmf (probability mass function?
b) What is the expected value of this game? Interpret in the context of the problem.
c) Find the standard deviation
5. In a gambling game, on every play, there is a 0.1 probability that you win $7 and a 0.9 probability that you lose $1.
a) Draw the pmf (probability mass function?
b) What is the expected value of this game? Interpret in the context of the problem.
c) Find the standard deviation
5. In a gambling game, on every play, there is a 0.1 probability that you win $7 and a 0.9 probability that you lose $1.
a) Draw the pmf (probability mass function?
b) What is the expected value of this game? Interpret in the context of the problem.
c) Find the standard deviation
Solution
X=7, P(X=7)=0.1
X=-1, P(X=-1)=0.9
E(X)=7*0.1-1*0.9= -0.2
E(X^2)=7^2*0.1+1*0.9=5.8
Var(X)=E(X^2)-[E(X)]^2
=5.8-0.2^2
=5.76
