Question

QUESTION 16

1. ​ At a fair carnival roulette wheel, a player can either win $10, $30, or $80. Assuming a rational player, how much should the game owner charge the player, to maximize his own profit?

   	a.	​$40
   	b.	​$30
   	c.	​$50
   	d.	​$80

QUESTION 17

1. ​ Six possibilities are equally likely and have payoffs of $2, $4, $6, $8, $10, and $12. The expected value is:

   	a.	​$4
   	b.	​$6
   	c.	​$5
   	d.	​$7

QUESTION 18

1. ​ A random variable is

   	a.	​A variable that is always zero
   	b.	​A variable that takes on null values only
   	c.	​A variable that takes of values that are uncertain
   	d.	​A variable that takes on known values

QUESTION 19

1. ​ A "false positive" is

   	a.	​When you correctly conclude that your hypothesis is false
   	b.	​When you correctly conclude that your hypothesis is true
   	c.	​When you incorrectly conclude that your hypothesis is true
   	d.	​When you incorrectly conclude that your hypothesis is false

  

QUESTION 20

1. ​Use the following information for questions 36-48

   Transcendent Technologies is deciding between developing a complicated thought-activated software, or a simple voice-activated software. Since the thought-activated software is complicated, it only has a 30% chance of actually going through to a successful launch, but would generate revenues of $50million if launched. The voice-activated software is simple and hence has a 80% chance of being launched but only generates a revenue of $10million. The complicated technology costs 10million, whereas the simple technology costs 2million.

   ​ What is the expected revenue from developing the complicated software?

   	a.	​$50million
   	b.	​$20million
   	c.	​$10million
   	d.	​$15million

Answer 1

Q16) The answer is (a) 40

The owner will charge the player the expect value of the winnings

= 1/3 * 10 + 1/3 * 30 + 1/3 * 80

= 120/3 = 40

Q17) Expected value = pr of value*value

= (2+4+6+8+10+12)/6 = 7

Thus, the answer is (d)

Q18) the answer is (c)

A random variable by definiton is one whose values are random or can not be known in advance.

Q19) the answer is (c)

If you incorrectly conclude that the hypotheisis is true, this is known as a false positive.

All other options are incorrect as they do not reflect the meaning of a false positive.