Solution-Expected value of consumption

Expected value of consumption

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Victor is a professional football player who earns $1000000 per year if he plays the whole season without injury. Suppose there is a 20% chance he will become injured and be unable to play (in which case he receives no income) Given that he will consume $1000000 if uninsured and $0 worth of consumption if uninjured, the expected value (EV) of his consumption is how many dollars?

Reference no: EM131400644

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Expected value of consumption

Reference no: EM131400644

Reference no: EM131400644

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