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1 bell, and 1 jackpot bar. The second reel has 7 cherries, 6 oranges, 1 lemon, 3

ID: 3320677 • Letter: 1

Question

1 bell, and 1 jackpot bar. The second reel has 7 cherries, 6 oranges, 1 lemon, 3 reel has 4 walnuts, 7 oranges, 5 lemons, 3 bells and 1 bar. The payoffs are: 1310 8) A standard slot machine has three reels. The first reel has 3 walnuts, 7 cherries, 3 oranges, 5 lemons, bells, and 3 bars. The third Reel 1 Payoff in Coins 85 25 20 18 14 16 10 Reel 2 Bar Bell Bell Reel 3 Bar Bar Bell Bar Bell Bell Lemon Lemon Bel Lemon Lemon Lemon Orange Orange Bar Orange Orange Orange Cherry Cherry Bell Cherry Cherry Walnut Cherry Cherry Any other (a) What is the expected payoff if each picture on each reel is equally likely to appear? (b) In the long run, what fraction of every dollar bet will this one-armed bandit (the slot machine) keep?

Explanation / Answer

(A)

Reel 1

Reel 2

Reel 3

Payoff in Coins

Probability

(Payoff in coins)*(Probability)

P(X)

20

20

20

1

1

3

1

85

0.000375

0.031875

2

1

3

1

25

0.000375

0.009375

3

1

3

3

20

0.001125

0.0225

4

5

1

3

18

0.001875

0.03375

5

5

1

5

14

0.003125

0.04375

6

3

6

1

16

0.00225

0.036

7

3

6

7

10

0.01575

0.1575

8

7

7

3

5

0.018375

0.091875

9

7

7

4

5

0.0245

0.1225

10

7

7

13

3

0.079625

0.238875

Sum

0.7880

So the expected payoff if each picture on each reel is equally likely to appear is 0.7880.

(B)

1-0.7880=0.2120
So in the long run, the fraction of every dollar bet will this one-armed bandit keep is 0.2120.

Reel 1

Reel 2

Reel 3

Payoff in Coins

Probability

(Payoff in coins)*(Probability)

P(X)

20

20

20

1

1

3

1

85

0.000375

0.031875

2

1

3

1

25

0.000375

0.009375

3

1

3

3

20

0.001125

0.0225

4

5

1

3

18

0.001875

0.03375

5

5

1

5

14

0.003125

0.04375

6

3

6

1

16

0.00225

0.036

7

3

6

7

10

0.01575

0.1575

8

7

7

3

5

0.018375

0.091875

9

7

7

4

5

0.0245

0.1225

10

7

7

13

3

0.079625

0.238875

Sum

0.7880