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1.You and a friend play a game where you each toss a balanced coin. If the upper

ID: 3073679 • Letter: 1

Question

1.You and a friend play a game where you each toss a balanced coin. If the upper faces on the coins are both tails, you win $2; if the faces are both heads, you win $8; if the coins do not match (one shows a head, the other a tail), you lose $4 (win ($4)).Calculate the mean and variance of Y, your winnings on a single play of the game. Note that E(Y) > 0.

E(Y)

V(Y)

How much should you pay to play this game if your net winnings, the difference between the payoff and cost of playing, are to have mean 0?

$

2.Each of three balls are randomly placed into one of three bowls.

Find the mean and standard deviation for Y = the number of empty bowls. (Round your answers to two decimal places.)

=

=

What is the probability that the value of Y falls within 2 standard deviations of the mean?

Explanation / Answer

1)

Y = 2 when TT

= 8 when HH

-4   when HT or TH

probability of each HH,TH,HT, TT = 1/4

hence

Y = 2 with p = 1/4

= 8 with p = 1/4

= -4   with p = 1/2

hence

E(Y) = 1/4 (2 + 8 ) + 1/2 (-4)

= 2.5 - 2 = 0.5

E(Y^2) = 0.25 * 2^2 + 0.25*8^2 + 0.5 * (-4)^2

= 25

Var(Y) = E(Y^2) - (E(Y))^2

= 25- 0.5^2

= 24.75