The television game show Deal or No Deal begins with individual suitcases containing the amounts of 1c, $1, $5, $10, $25, $50, $75, $100, $200, $300, $400, $500, $750, $1000, $5000, $10,000, $25,000, $50,000, $75,000, $100,000, $200,000, $300,000, $400,000, $500,000, $750,000, and $1,000,000. If a player adopts the strategy of choosing the option of “no deal” until one suitcase remains, the payoff is one of the amounts listed, and they are all equally likely.
a. Find the expected value for this strategy.
b. Find the value of the standard deviation.
c. Use the range rule of thumb to identify the range of usual outcomes.
d. Based on the preceding results, is a result of $750,000 or $1,000,000 unusually high? Why or why not?