Question

A bet on “black” in Roulette has a probability of 18/38 of winning. If you win, you double your money. You can bet anywhere from $1 to $100 on each spin.
a. Suppose you have $10, and are going to play until you go broke or have $20. What is your best strategy for playing? Explain using information you learned in this module's material, such as expected value.

Answer 1

18/38 - 47% chance of success
$1 to $100 - $10 to spend

With this given information, their is two routes to take, play it safe, or defy the odds. Though, a 47% chance isn’t far from 50/50, and at the end of the day, it is only $10 to lose. Therefore, in my opinion, even with the expected value, I would say to bet all the money at once, since the goal is to leave with $20.