# D 4 points use the appropriate box model from b to

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(d) (4 points) Use the appropriate box model from (b) to find the approximate chance that Person 1 wins \$10 or more. If this is not possible, explain why not, giving as much detail as possible.
Stat 20 Midterm Exam, Page 6 of 9 1 May 2014
4. Imagine that you work for the Nevada Gaming Commission, checking that games of chance played in casinos actually have the advertised chances of winning and losing. You are tasked with evaluating a game which has two outcomes– winning \$1.50 or losing \$1. The usual procedure for evaluating games is to perform a hypothesis test, where the null hypothesis is that the game’s outcomes occur with the chances that the casino claims, and the alternative hypothesis is that the game’s outcomes do not occur with the chances that the casino claims. If the p-value is statistically significant, the game is considered discredited, and must be closed. If it is not statistically significant, the game may remain open. When you arrive at the casino to test the game, you have forgotten the paperwork which tells you what the chances for the two outcomes should be, so you are unable to perform a test. (a) (3 points) Your assistant suggests that since you cannot complete a hypothesis test, you can instead calculate a confidence interval for the chance of winning. What do you think of this plan? Explain. If you agree with this plan, be sure to specify what confidence level the interval should have and why.
Stat 20 Midterm Exam, Page 7 of 9 1 May 2014