Sampling distribution: Exercises

7.5 Sampling Distributions: Exercises 1. A roulette wheel has 38 slots, of which 18 are black, 18 are red, and 2 are green. When the wheel is spun, the ball is equally likely to come to rest in any of the slots. One of the simplest wagers is to "bet on red." A bet of $1 on red returns $2 if the ball lands in a red slot. Otherwise, you lose your dollar if the ball lands in a black slot or a green slot. (The two green slots belong to the house.) [2, 10.19] (a) What is the expected gain on a $1 bet on red? (b) One way to think of the expected value in this case is that it is the "mean loss/gain per bet". Explain what the law of large numbers tells us about what will happen if a gambler makes many bets on red