Question

A is selling his house, and has decided to accept the first offer exceeding $k. Assume...

A is selling his house, and has decided to accept the first offer exceeding $k. Assume that successive offers are independent random variables with common distribution Exp(λ).

a) Find the expected number of offers he will reject before he sells the house;

b) Find the expected value of the offer he will accept.

Math   Statistics-And-Probability   
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