In the basic version of Horizons (H1) the player has a maximum of n turns, where n⩾1. At each turn, she has a probability p of success, where 0<p<1. If her first success is at the rth turn, where 1⩽r⩽n, she collects r pounds and then withdraws from the game. Otherwise, her winnings are nil. Show that in H1, her expected winnings are p−1[1+nqn+1−(n+1)qn]pounds, where q=1−p.
The rules of H2 are the same as those of H1, except that n is randomly selected from a Poisson distribution with parameter λ. If n=0 her winnings are nil. Otherwise she plays H1 with the selected n. Show that in H2, her expected winnings are p1(1−e−λp)−λqe−λppounds.