GEM2900, 2014/2015 Semester II

Exercise Sheet 01

Exercise 1. Suppose we make a spinner as shown in the picture.

The experiment is to spin the pointer vigorously and see what color it stops on. We are interested to obtain the probability that the spinner stops on the grey region. Which interpretation
of probability would be suitable?
(a) Propensity
(b) Long-run relative frequency
(c) Degrees of belief
Exercise 2. Refer to Example 1.7 in the lecture notes. With odds offered for both games, you
choose to place a stake of $5 on the 1st game and a stake of $5 on the 2nd game. What will
happen?
Exercise 3. Refer to Example 1.9 in the lecture notes. With odds offered for four horses, you
choose to outlay $210 in the following way:
Horse A: $20
Horse B: $40

Horse C: $50
Horse D: $100

What will happen?

Exercise 4. You and your friend, Heng Heng, visit the race course. You two are interested
in betting on a horse, named HorSay, involved in the race. The bookie offers odds of 3 to 1
against for HorSay. Heng Heng suggests that instead of betting with the bookie, youll simply
bet with each other with the odds published by the bookie (3 to 1 against for HorSay). Heng
Heng also gives you the option of either placing the bets with him or receiving the bets from
him.
Which one of the following strategies will be worth adopting?
(a) You do a quick assessment on HorSay and think the horses chance of winning the race is
about 33%, so you receive the bets from Heng Heng.
(b) You do a quick assessment on HorSay and think the horses chance of winning the race is
about 33%, so you place the bets with Heng Heng.
(c) You do a quick assessment on HorSay and think the horses chance of winning the race is
about 20%, so you receive the bets from Heng Heng.
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GEM2900, 2014/2015 Semester II

Exercise Sheet 01

(d) You do a quick assessment on HorSay and think the horses chance of winning the race is
about 20%, so you place the bets with Heng Heng.
(e) It doesnt really matter.
Exercise 5. Draw a card from a deck of 52 cards. Events A and B are defined to be
A = {draw an ace},

B = {draw a black card}.

If the card drawn is an ace of hearts, have the events A, A B, and A B occurred?
Exercise 6. Suppose that you toss a pair of fair dice (one in red and the other in blue) and
note the points on sides facing up. Define the events:
A = {red die shows 1, 2 or 3}, B = {red die shows 3, 4 or 5}, C = {sum of two dice equals 9}.
Are events A, B, and C mutually independent?
Exercise 7. Roll a fair die once and note the point facing up. Define
A = {2, 4, 6} and D = {1, 2, 3, 5}.
Are events A and D independent?
Exercise 8. Suppose that A and B are two events with P (A) = 3/4 and P (B) = 1/3.
(i) Explain why P (A B) 1/3.
(ii) Explain why P (A B) 1/12.
(iii) Explain under what conditions you would have P (A B) = 1/3 or P (A B) = 1/12.

Answers
2.

0; 5

3.

170; 50; 40; 790

Note: Solutions will be uploaded by the end of Week 4.

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