By D. Kannan

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If we let q = 1(0) -f(l), then f (2) = 1 - q - q = 1 - 2q, and by induction, f (k) = 1 - kq. Use the boundary condition at k = N to see that 0 = f (N) = 1 - Nq. Thus q = 1/N, and f (k) = N for all k. 9) Notice that the probability of ruin is a linear function of the initial stake. 7. A friend tells us that he goes to Las Vegas for business each year, and gambles at a casino until he wins enough money to pay for his hotel room. He claims to be be such a good gambler that he has done this the last five years hand-running, and never lost.

We will prove it later. 1. Probability Spaces 16 land in C, and, of those, n(A fl c) land in A. So we estimate P{A I C} by n(A fl C}/n(C). Now use the law of averages again. P{A I C} = n(An c) N oo Jim An cl - PfP{C} N_ n(N n(C) Conclusion: The conditional probability must be defined as follows. 16. Let A and C be events. 1) P{A n C} = P{A I C}P{C} . We said that conditional probability is legendary for producing surprising results. Let us look at some examples to support this. 1. An ancient Chinese sandalwood chest has three drawers.

16. R. de Montmort, writing in 1708, posed a problem on the French game Jeu de Boules. The object of the game is to throw balls close to a target ball. The closest ball wins. Suppose two players, A and B have equal skill. Player A tosses one ball. Player B tosses two. What is the probability that player A wins? 17. Deal cards one-by-one from a well-shuffled bridge deck until only one suit is left. What is the probability that it is spades? 18. A number is chosen at random from the interval [0, 1].