STAT 4101/5101 Lab3

Bingxin Zhao

Question 1
Consider the following game: A player throws a fair die repeatedly until he rolls a 2, 3, 4, 5 or
6. In other words, the player continues to throw the die as long as he rolls 1s. When he rolls a
“non-1”, he stops.

• a. What is the probability that the player tosses the die exactly three times?

• b. What is the expected number of rolls needed to obtain the first non-1?

• c. If he rolls a non-1 on the first throw, the player is paid $1. Otherwise, the payoff is doubled
for each 1 that the player rolls before rolling a non-1. Thus, the player is paid $2 if he rolls a
1 followed by a non-1; $4 if he rolls two 1s followed by a non-1 and so on. In general, if we
let Y be the number of throws needed to obtain the first non-1, then the player rolls (Y-1) 1s
before rolling the first non-1, and he is paid 2Y −1 dollars. What is the expected amount paid
to the player?

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Stat 4101/5101 Bingxin Zhao

Question 1
Consider the following game: A player throws a fair die repeatedly until he rolls a 2, 3, 4, 5 or
6. In other words, the player continues to throw the die as long as he rolls 1s. When he rolls a
“non-1”, he stops.

• a. What is the probability that the player tosses the die exactly three times?

• b. What is the expected number of rolls needed to obtain the first non-1?

• c. If he rolls a non-1 on the first throw, the player is paid $1. Otherwise, the payoff is doubled
for each 1 that the player rolls before rolling a non-1. Thus, the player is paid $2 if he rolls a
1 followed by a non-1; $4 if he rolls two 1s followed by a non-1 and so on. In general, if we
let Y be the number of throws needed to obtain the first non-1, then the player rolls (Y-1) 1s
before rolling the first non-1, and he is paid 2Y −1 dollars. What is the expected amount paid
to the player?

Solution:
Let Y denote the number of rolls until the player stops. Then, we know that Y is a geometric
distribution with p = 56 .

a
1 5 5
P (Y = 3 ) = ( 1 − p ) 2 p = ( ) 2 × =
6 6 216

The expected number of rolls is just EY, so we have

1 6
EY = =
p 5

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The expected amount paid to this player is

∞
E(2Y −1 ) = ∑ 2y −1 (1 − p ) y −1 p
y =1
∞
=p ∑ (2 − 2p)y−1
y =1
∞
=p ∑ (2 − 2p)x
x =0
p p 5
= = =
1 − (2 − 2p) 2p − 1 4

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Question 2
When seeds are randomly dispersed over a wide area, the number of neighbors that any seedling
has within area of size A usually follows a Poisson distribution with mean equal to A*d, where d
is the density of seedlings per unit area. Suppose that the density of seedlings is four per square
meter. What is the probability that a specified seedling has:

• a. no neighbors within 1 meter

• b. at most three neighbors within 3 meters

λk e−λ
pdf of Poisson distribution with parameter λ: P(Y = k) = k!

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Stat 4101/5101 Bingxin Zhao

Question 2
When seeds are randomly dispersed over a wide area, the number of neighbors that any seedling
has within area of size A usually follows a Poisson distribution with mean equal to A*d, where d
is the density of seedlings per unit area. Suppose that the density of seedlings is four per square
meter. What is the probability that a specified seedling has:

• a. no neighbors within 1 meter

• b. at most three neighbors within 3 meters

λk e−λ
pdf of Poisson distribution with parameter λ: P(Y = k ) = k!
Solution:
Let Y denote the number of neighbors for a seedling within an area of size A. Thus, Y follows
Poisson distribution with parameter λ = A ∗ d

Since A ∗ d = 4π, we have

(4π )0 e−4π
P (Y = 0 ) = = e−4π
0!

Since A ∗ d = 36π, we have

P(at most 3) = P(Y = 0) + P(Y = 1) + P(Y = 2) + P(Y = 3)

(36π )0 × e−36π (36π )1 × e−36π (36π )2 × e−36π (36π )3 × e−36π
= + + +
0! 1! 2! 3!

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Question 3
Accident records collected by an automobile insurance company give the following information.
The probability that an insured driver has an automobile accident is 0.15. If an accident has
occured, the damage to the vehicle amounts to 20% of its market value with a probability of 0.80,
to 60% of its market value with a probability of 0.12, and to a total loss with a probability of
0.08. What premium should the company charge on a $12000 car so that the expected gain by the
company is zero?

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Stat 4101/5101 Bingxin Zhao

Question 3
Accident records collected by an automobile insurance company give the following information.
The probability that an insured driver has an automobile accident is 0.15. If an accident has
occured, the damage to the vehicle amounts to 20% of its market value with a probability of 0.80,
to 60% of its market value with a probability of 0.12, and to a total loss with a probability of
0.08. What premium should the company charge on a $12000 car so that the expected gain by the
company is zero?
Solution:
Let Y represent the gain to the insurance company for a particular insured driver and P be the
premium charged to the driver

Table 1

y P P-12000*0.2 P-12000*0.6 P-12000

P (Y = y ) 0.85 0.15*0.8 0.15*0.12 0.15*0.08

Then, we have

EY = P.85 + ( P − 2400) × 0.12 + ( P − 7200) × 0.018 + ( P − 12000) × 0.012 = 0

we have P = 561.6.

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Problem 4
Sam, Fred, and Vishy in that order take turns shooting at a bull’s eye. Their success rates are 20%;
30%, and 40%. What are the probabilities of each making the first hit at the bull’s eye?

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Stat 4101/5101 Bingxin Zhao

Problem 4
Sam, Fred, and Vishy in that order take turns shooting at a bull’s eye. Their success rates are 20%;
30%, and 40%. What are the probabilities of each making the first hit at the bull’s eye?
Solution:
Let A denote the event "Sam hits at the bull’s eye", let B denote the event "Fred hits at the bull’s
eye" and let C denote the event "Vishy hits at the bull’s eye".
The probability that Sam making the first hit including the events "Sam hits the bull’s eye at
the his first shoot", "Sam hits the bull’s eye at the his second shoot but Fred and Vishy don’t hit
the bull’s eye at their first shoot" and · · ·

P( A) = 0.2 + 0.2 × (0.8 × 0.7 × 0.6) + 0.2 × (0.8 × 0.7 × 0.6)2 + · · ·

∞
= ∑ 0.2 × 0.336i
i =0
0.2
=
1 − 0.336
≈ 0.3012

Similarly, the probability that Fred making the first hit is

P( B) = 0.8 × 0.3 + 0.8 × 0.3 × (0.8 × 0.7 × 0.6) + 0.8 × 0.3 × (0.8 × 0.7 × 0.6)2 + · · ·
∞
= ∑ 0.24 × 0.336i
i =0
0.24
=
1 − 0.336
≈ 0.3614

Similarly, the probability that Vishy making the first hit is

P(C ) = 0.8 × 0.7 × 0.4 + 0.8 × 0.7 × 0.4 × (0.8 × 0.7 × 0.6) + 0.8 × 0.7 × 0.4 × (0.8 × 0.7 × 0.6)2 + · · ·
∞
= ∑ 0.224 × 0.336i
i =0
0.224
=
1 − 0.336
≈ 0.3373

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