1) You are invited to a poker game in which 10 people play. $75 goes to the winn

Question

1) You are invited to a poker game in which 10 people play. $75 goes to the winner, $50 goes to second place, and $25 goes to third, You feel that you are a better player than average and that if you play you have a 20% chance ofw inning, 20% chance of coming in second, and a 20% chance of coming in third. What would be your expected winnings if you entered the tournament? Now assume you are required to pay a $20 entrance fee. Should you enter the tournament? Wh a) b) 2) You are hiring 2 new employees from a pool of 20 applicants. Assume you select the 2 mployees at random. You know 15 will be good employees and 5 will be bad employees. . If you hire 2 good employees, your profit will be $500. . If you hire one good and one bad employee, your profit will be $300. . If you hire 2 bad employees, you lose $200. a) What is the expected value of your profits? b) What is the standard deviation of your profits?

Explanation / Answer

a) Expected winnings:

75 * 0.2 + 50 * 0.2 + 25 * 0.2 = $30

b) If $20 is an entrance fee i would play as my expected winnings are greater than entrance fee of $20.

So, if i play i will still have a good chance of making a profit of $10

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.