Answer:
Following are the solution to the given question:
Step-by-step explanation:
The population std. dev of the dog weight=8
[tex]\sigma=8\\\\P(\text{guess with in 16 lbs}) = P(|X-\mu|\leq 16)\\\\=P(-2 \leq Z \leq 2) = 0.9544\\\\[/tex]
Calculating the payout w s.t:
[tex]E[netpay]=0=(-5) \times 0.9544+w\times (1-0.9544)\\\\ w =(5 \times \frac{0.9544}{1-0.9544}) =\$ 104.65[/tex]
therefore, we assume that the weight of the dog is a normal distribution with std. deviation that is 8.
