Ask Question
10 March, 03:09

Suppose each round costs $1.00 at a slot machine on which you can win $2.00 with probability p = 40%. You start playing with $10.00 and decide that you will keep playing until you either double your wealth (that is, earn another $10.00) or run out of money. What is the probability that you run out of money? (Remember: You do not need to simplify your answer.)

+2
Answers (1)
  1. 10 March, 05:03
    0
    0.0061514752

    Explanation:

    probability of not winning $2 = 0.6

    Pobability of doubling wealth: p^10 = (0.4) ^10 = 0.0001048576

    probability of running out of wealth or not earned anything: (0.6) ^10 = 0.0060466176

    Probability of doubling or running out of wealth = 0.0001048576 + 0.0060466176 = 0.0061514752
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suppose each round costs $1.00 at a slot machine on which you can win $2.00 with probability p = 40%. You start playing with $10.00 and ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers