The Tri-State Pick 3 Refer to Exercise 42. You and a friend decide to play Pick 3, but

Chapter 6, Problem 52

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QUESTION:

Refer to Exercise 42. Suppose you buy one Pick 3 ticket on each of two consecutive days. Find the expected value and standard deviation of your total winnings. Show your work.

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QUESTION:

Refer to Exercise 42. Suppose you buy one Pick 3 ticket on each of two consecutive days. Find the expected value and standard deviation of your total winnings. Show your work.

ANSWER:

Step 1 of 5

Refer to Exercise 42,

The Tri-State Pick 3 Most states and Canadian provinces have government-sponsored lotteries. Here is a simple lottery wager, from the Tri-State Pick 3 game that New Hampshire shares with Maine and Vermont. You choose a number with 3 digits from 0 to 9; the state chooses a three-digit winning number at random and pays you $500 if your number is chosen. Because there are 1000 numbers with three digits, you have probability 1/1000 of winning. Taking X to be the amount your ticket pays you, the probability distribution of X is :

\(\begin{array}{lll} \text { Payoff: } & \$ 0 & \$ 500 \\ \text { Probability: } & 0.999 & 0.001 \end{array}\)

You and a friend decide to play Pick 3, but with two different strategies. Your friend buys a $1 Pick 3 ticket on each of five consecutive days. You bet $5 on a single number on your Pick 3 ticket.

It is required to find the mean and standard deviation of the total winnings for you and your friend.

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