Question
Could you explain how to solve this problem? Thanks. SupposeyouenteracasinowithDdollars.Youdecidetoplaya gamewhereyouflipafaircoin,andifitisheadsyougain1dollar,andifitstails youlose1dollar.Supposeyoualsodecideinadvancethatifyouatanypointhave Rdollarsintotal,thenyouaresufficientlyrichandwillleavethecasino.Youalso willbeforcedtoleaveifyoueverhavezerodollarsintotal. (i)Showthatitisimpossibleforthegametocontinueindefinitely,orinother wordsthattheprobabilityyouneverreachRorzerodollarsiszero. (ii)Whatistheprobabilitythatyouleaverich? (Hint:forbothparts,tryusingconditionalprobabilities,andnotethatifyoustart withD=RorD=0dollars,thenthegameisimmediatelyover.)
Could you explain how to solve this problem? Thanks.
SupposeyouenteracasinowithDdollars.Youdecidetoplaya gamewhereyouflipafaircoin,andifitisheadsyougain1dollar,andifitstails youlose1dollar.Supposeyoualsodecideinadvancethatifyouatanypointhave Rdollarsintotal,thenyouaresufficientlyrichandwillleavethecasino.Youalso willbeforcedtoleaveifyoueverhavezerodollarsintotal. (i)Showthatitisimpossibleforthegametocontinueindefinitely,orinother wordsthattheprobabilityyouneverreachRorzerodollarsiszero. (ii)Whatistheprobabilitythatyouleaverich? (Hint:forbothparts,tryusingconditionalprobabilities,andnotethatifyoustart withD=RorD=0dollars,thenthegameisimmediatelyover.)
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
