Question

In the game of​ roulette, when a player gives the casino ​$16 for a bet on the number 26​, the player has a 37/38 probability of losing ​$16 and a 1/ 38 probability of making a net gain of ​$560. ​(The prize is ​$576​, but the​ player's ​$16 bet is not​ returned, so the net gain is ​$560​.) If a player bets ​$16 that the outcome is an odd​ number, the probability of losing ​$16 is 20/38 and the probability of making a net gain of ​$16 is 18/38. ​(If a player bets ​$16 on an odd number and​ win, the player is given ​$32 that includes the​ bet, so the net gain is ​$16​.) Complete parts​ (a) through​ (c) below.

a: if a player bets ​$16 on the number 26​, what is the​ player's expected​ value?

b: if a player bets $16 that the outcome is an odd number, what is the players expected value?

c: is the best option to bet on 26, to bet on odd, or not to bet? why?

Answer 1