SOLUTION: Essay; show all work. A community 5K run will award $50 to the winner. 60 people enter the race, and they each pay an entry fee of $20. Assuming they are all equally likely to win,
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Question 422983: Essay; show all work. A community 5K run will award $50 to the winner. 60 people enter the race, and they each pay an entry fee of $20. Assuming they are all equally likely to win, what is a fair price for the competition? Round to the nearest cent. Answer by stanbon(75887) (Show Source):
You can put this solution on YOUR website! Essay; show all work. A community 5K run will award $50 to the winner. 60 people enter the race, and they each pay an entry fee of $20. Assuming they are all equally likely to win, what is a fair price for the competition? Round to the nearest cent.
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Random-gain values: 50-20 = 30 ; -20
Probabilities: 1/60 ; 59/60
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E(gain)= 30(1/60)-20(59/60) = 1/2 - (59/3)= (3-59)/6 = -$9.33
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A fair price would be 20-9.33 = $10.67
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Cheers,
Stan H.
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