URGENT: STAT PROBLEM
You are given a choice of two lottery tickets. One of them has a 10% chance of winning $10,000, and the other has a 50% chance of winning $2000. you will play this game 100 times. if you can only choose one of the the 2 strategies for all 100 games, which do you choose and why?
**how much would you sell either ticket?
**If there is only one try, what is the expected value and future value of both strategies?
I was lost as hell with this one. Please help!!. Please and thank you.
Same EV for both games. 1K . no idea what future value means. but since you aren't playing these games till infinity. pick the one with lower variance. (lower risk)
variance for 10% of 10k = =(9000^2)0.1+(-1000)^20.9=9 Million 2. for 50% of 2K is (2000-1000)^20.5+(-1000)^20.5 = 1million
so obviously the second game
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