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STAT 1301
Probability & Statistics
L
t
7
Lecture 7
21
•
Blackjack
•
"21" is the fact-based story about six
MIT students who were trained to
become experts in card counting and
subsequently took Vegas casinos for
millions in winnings.
Gambler’s Ruin Problem
•
Two gamblers,
A
and
B
, bet on the outcomes of
successive flip of a coin. On each flip, if the coin
comes up heads,
A
collects $1 from
B
, whereas if
it comes up tails,
A
pays $1 to
B
. They continue to
play until one of them runs out of money.
Assume that the flips are independent and each
flip results in a head with probability
p
=1/2,
what
is the probability that
A
ends up with all the money
if he starts with $5 and
B
starts with $10?
Discrete and Continuous
Random Variables