Question

80. A game popular in Nevada gambling casinos is Keno, which is played as follows: 1\venty numbers are selected at random by the casino from the set of numbers 1 through 80. A player can select from 1 to 15 numbers; a win occurs if some fraction of the player's chosen subset matches any of the 20 numbers drawn by the house. The payoff is a function of the number of elements in the player's selec- tion and the number of matches. For instance, if the player selects only 1 number, then he or she wins if this number is among the set of 20, and the payoff is $2.20 won for every dollar bet. (As the player's probability of winning in this case is i, it is clear that the "fair" payoff should be $3 won for every $1 bet.) When the player selects 2 numbers, a payoff (of odds) of $12 won for every $1 bet is made when both numbers are among the 20. (a) What would be the fair payoff in this case

Answer 1

Note: Complete Question part

(a) What would be the fair payoff in this case?

Let Pn ,k denote the probability that exactly k of the n numbers chosen by the player are among the 20 selected by the house.

Answer:

the fair payoff is $16.63

Step-by-step explanation:

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