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8. [10 pts] You simultaneously flip a pair of fair coins. Your friend gives you $1 if both coins come up heads. You repeat
8. [10 pts] You simultaneously flip a pair of fair coins. Your friend gives you $1 if both coins come up heads. You repeat this ten times and your friend gives you X dollars. a. [4 pts] Find E[X], the expected number of dollars you receive. b. [2 pts] What is the probability that you do "worse than average" (i.e., receive fewer than the expected number of dollars)? c. [2 pts] What is the probability that you do "better than average"? d. [2 pts] What is the probability that you receive exactly the expected number of dollars?
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An Introduction to the Mathematics of Financial Derivatives
Authors: Ali Hirsa, Salih N. Neftci
3rd edition
012384682X, 978-0123846822
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