Life insurance companies take risks much like arcade game owners take risks. Mollie has a booth on a popular beach boardwalk. She charges $2 per game. Winners receive a $5 prize. The probability of winning the game is 0.1.
a. What is the probability of losing the game?
b. What profit does Mollie earn if a person wins the game?
c. What profit does Mollie earn if the person loses the game?
d. Set up a table indicating the profit and the probability of winning and losing.
e. What is Mollie's expected profit per game?
f. If 500 people play this game on a summer weekend, what is Mollie's profit for the weekend?