Question No 5.3 Recently, a regional automobile dealership sent out
fliers to perspective customers, indicating that they had
already won one ofthree different prizes: a 2008 Kia Optima
valued at $15,000, a $500 gas card, or a $5 Wal-Mart shopping
card, To claim his or her prize, a prospective customer
needed to present the flier at the dealership’S showroom. The
fine print on the back of the flier listed the probabilities of
winning. The chance of winning the car was lout of3 I ,478,
the chance of winning the gas card was lout of 31,478, and
the chance of winning the shopping card was 31,4 76 out
31,478.
a. How many fliers do you think the automobile dealership
sent out?
b. Using your answer to (a) and the probabilities listed on
the flier, what is the expected value of the prize won by a
prospective customer receiving a flier?
c. Using your answer to (a) and the probabilities listed on
the flier, what is the standard deviation ofthe value of the
prize won by a prospective customer receiving a flier?
d. Do you think this is an effective promotion? Why or why
not?
