Question
Game One: throw dart at a wheel that is equally divided into 5 parts (1,2,3,4,5). Each part rewards their respective numbered amount of coins. Assume
Game One:
throw dart at a wheel that is equally divided into 5 parts (1,2,3,4,5). Each part rewards their respective numbered amount of coins. Assume you never miss the wheel. (It costs 1 coin to enter game one)
Game Two:
you are given a box with 99 balls, 33 gold and the remaining blue. You draw 9 balls from this box at random with replacement. For each gold ball you have, you are rewarded with 1 coin. Blue balls are not worth nothing. (It costs 2 coins to enter this game)
QUESTION:
If you're only given 2 coins and you can only choose one of the two games to enter, which game would you enter in order to achieve the maximum EXPECTED reward while not taking too much risk?
HINT: calculate both expectations and the variance for rewards in both games. Also note that the games both don't cost the same amount of coins. You want the game with the highest EXPECTED reward and lowest VARIANCE.
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