Chaps 1. Winnings and Losing. Suppose that a person wins a game of chance with probability...
Chaps 1. Winnings and Losing. Suppose that a person wins a game of chance with probability 0.40. and loses otherwise. If he wins, he earns 5 dollars, and if he loses, then he loses 4 dollars. (a.) What is his expected gain or loss? boeqabat om llo onodg d 1d S a a(b.) What is the variance of his gain or loss? (c.) Find const ants a, b such that if X 0 when he loses and X = 1 when he wins, then Y =aX +b is his earnings. [Hint: solve 5= a(1) +b and -4=a(0) + b. Also: X is a Bernoulli.] Verify your results above by finding E(Y) and Var (Y) with this method. dw ods eo anodq ton ed no ssol 1liw oy anti to to botoqp ai lo otaiveb bana nds ai 1siW (b) en sd o sool Ili