HW2: Problem #1 part #4

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HW2: Problem #1 part #4

Anas
Does anyone know what exactly should do in part 4 of problem #1 from homework 2?
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Re: HW2: Problem #1 part #4

Darth Knight
At the beginning, we need to put some money on the table for the gambling; that is, K in the setting.
We could call it "ante" for example.

Then, we are going to get paid 4Y and this is based on your two-dice result.
We can make this game fair, by finding out a proper K.
This is certainly possible because we know the probability structure from the previous questions.
Thus, you could equate the followings: "expected" money you get paid = K.

(There would be no certain equality in our real life, so that you always have the expected money you get paid less than K when you visit Las Vegas or Atlantic City.)

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Re: HW2: Problem #1 part #4

Anas
Thank you Darth!