Author Question: Suppose a slot machine has an expected payout of .95 cents on the dollar, meaning for every dollar ... (Read 18 times)

armygirl · **on:** Jul 24, 2018

Suppose a slot machine has an expected payout of .95 cents on the dollar, meaning for every dollar you play, you get 95 cents back. What is your expected value for the amount lost per dollar played on this machine?
a. 0.95
b. -0.05
c. -1.00
d. The entire jackpot, if you play long enough.

Question 2

Suppose 5 of the people who buy a certain type of DVD player return it to get their money back. The DVD player costs 100 . What is the expected loss, per customer, for the company due to returns (ignoring the monetary value of the returned DVD player)?
a. 5
b. 0; most people don't return it
c. Either 0 or 100, but it is impossible to determine which.
d. 100