In the final round of a TV game show, contestants have a chance to increase their...

In the final round of a TV game show, contestants have a chance to increase their current winnings of $1 million to $2 million. If they are wrong, their prize is decreased to $500,000. A contestant thinks his guess will be right 50% of the time. Should he play? What is the lowest probability of a correct guess that would make playing profitable?

Solutions

Expert Solution

We need to calculate the expected value of the increase and decrease in the prize money:

So as the expected value is positive, the contestant should answer

To coalculate the minimum probablity to make playing profitable, we need to calculate the probability where Expected value = 0

So the minimum probability of success for accepting the project should be 0.33 or 33% as if it is lower, the expected value will be negative

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

You're a contestant on a TV game show. In the final round of the game, if...

You're a contestant on a TV game show. In the final round of the game, if contestants answer a question correctly, they will increase their current winnings of $1 million to $2 million. If they are wrong, their prize is decreased to $500,000. You believe you have a 10% chance of answering the question correctly. Ignoring your current winnings, your expected payoff from playing the final round of the game show is $...... . Given that this is Negetive or...

In the game Plinko on the television game show The Price is Right, contestants have the...

In the game Plinko on the television game show The Price is Right, contestants have the opportunity to earn “chips” (flat, circular disks) that can be dropped down a peg board into slots labeled with cash amounts. Every contestant is given one chip automatically and can earn up to four more chips by correctly guessing the prices of certain small items. If we let p denote the probability a contestant correctly guesses the price of a prize, then the number...

A game show has a host and three contestants. Suppose the three contestants are Meg, Tyler...

A game show has a host and three contestants. Suppose the three contestants are Meg, Tyler and Ashley. The host and each contestant each have a bag with 3 marbles; one red, one white and one blue. The host will choose a marble from her bag, then Meg will choose a marble from her bag. If Meg’s marble is the same color as the host, then Meg has won and the game is over. If Meg loses, then Tyler will...

1 . Individual Problems 17-2 You're a contestant on a TV game show. In the final...

1 . Individual Problems 17-2 You're a contestant on a TV game show. In the final round of the game, if contestants answer a question correctly, they will increase their current winnings of $2 million to $3 million. If they are wrong, their prize is decreased to $1,000,000. You believe you have a 25% chance of answering the question correctly. Ignoring your current winnings, your expected payoff from playing the final round of the game show is__________. Given that this...

Why the TV show The Price is Right reveals contestants’ preference for unreal prices? What are...

Why the TV show The Price is Right reveals contestants’ preference for unreal prices? What are the psychological factors in pricing that affect the prices chosen by these contestants?

a) At a carnival, the chance of winning the ring toss game is 10%. Show the...

a) At a carnival, the chance of winning the ring toss game is 10%. Show the probability distribution (table) for 5 games played. b) If the carnival owner thinks that the average player has a 5% chance of winning the ring toss game, and about 500 people play each day, how many prizes should they keep in stock so that the probability of running out of prizes is less than 15% (using normal approximation)?

Game of Thrones ~ The creators David Benioff and D. B. Weiss of the TV show...

Game of Thrones ~ The creators David Benioff and D. B. Weiss of the TV show “Game of Thrones” want to know how popular Season 8 was among the show’s fans. They hired an analyst who collected a random sample of 40,776 Game of Thrones fans, and found that 8,473 of those fans said that they like Season 8. Using this data, the analyst wants to estimate the actual proportion of fans who like Season 8. To calculate the required...

The creators David Benioff and D. B. Weiss of the TV show “Game of Thrones”, want...

The creators David Benioff and D. B. Weiss of the TV show “Game of Thrones”, want to know how popular Season 8 was among the show’s fans. They hired an analyst who collected a random sample of 40,106 Game of Thrones fans, and found that 8,156 of those fans said that they like Season 8. Using this data, the analyst wants to estimate the actual proportion of fans who like Season 8. What is the lower bound for a 90%...

A weekend TV game show called rolling a dice is running each week. For each roll,...

A weekend TV game show called rolling a dice is running each week. For each roll, if the dice shows an odd number the participate earns 5 dollars and otherwise, he gets nothing. Each participate can roll the dice 20 times. Let X denote the number times the dice shows an odd number. (2 mark) Calculate the average earning of a participate. Calculate the probability that ? ⩽ 2 (show your final answer correct to four decimal places). Under appropriate...

*DO NOT ROUND OFF ANY ANSWER UNTILL YOUR FINAL ANSWER. ROUND YOUR FINAL ANSWER TO THE...

*DO NOT ROUND OFF ANY ANSWER UNTILL YOUR FINAL ANSWER. ROUND YOUR FINAL ANSWER TO THE NEAREST WHOLE DOLLAR* Present value of an ordinary annuity periods 3 5 9 10 4% 2.77 4.45 7.43 8.11 8% 2.57 3.99 6.25 6.71 On april 1,2020, ABC company rendered services to jones company in exchange for 3 year $400000 ,8% note. Payments of P&I (principal & interest) are due each april 1st, with the first payment due immediately. December 31st is the fiscal...

Subjects