A Fair Coin Is flIpped Until a Tail fiRst Appears

question 24

Essay

A fair coin is flipped until a tail first appears, at which time no more flips are made.
(a) What is the probability that exactly five flips are made?
(b) What is the expected number of flips?

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Definitions:

Investment Project

A project or activity requiring capital expenditure with the expectation of achieving future profits or benefits.

Discount Factor

A multiplier used in discounted cash flow analysis to calculate the present value of future cash flows, reflecting the time value of money.

Discount Rate

The interest rate used to discount future cash flows to their present value, often in the context of evaluating investments or loan decisions.

Net Present Value

A calculation used to assess the profitability of an investment, considering the present value of its cash flows and initial cost.