1. Suppose a person is shooting at a very small target. Assume that the person h
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Question
1. Suppose a person is shooting at a very small target. Assume that the person hits the target 1.5 percent of time. If the person hits the target, then the person wins $25,000. If the target is missed the loss is $500. Consider the amount of money to be won in this contest.
What is the variable? The money to be won in the contest.
What are the values of the variable? [$25,000, ($500)] is my answer for this one.
What is the probability distribution?
What is the expected amount of money to be won? $37500 is my answer
What is the probability that the person does not lose money?
Explanation / Answer
The variable is the money amount to be won in the contest.
The values of the variable is $25000, $500
It is a binomial distribution
The expected amount of money to be won is: 0.015*25000-0.985*500=-117.5. He will lose $117.50
The probability that the person does not lose money is 1.5% or 0.015
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