3.5.6 A baseball trading card that you have for sale may be quite valuable. Suppose that the successive bids 1; 2; : : : that you receive are independent random variables with the geometric distribution Prf D kg D 0:01.0:99/k for k D 0;1; : : : :

If you decide to accept any bid over $100, how many bids, on the average, will you receive before an acceptable bid appears?

Hint: Review the discussion surrounding equation (3.35).