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What is Oriole expected cash flow

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Reference no: EM132908114

Question - Oriole made a friendly wager with a colleague that involves the result from flipping a coin. If heads comes up, Oriole must pay her colleague $17; otherwise, her colleague will pay Oriole $17.

What is Oriole's expected cash flow, and what is the variance of that cash flow if the coin has an equal probability of coming up heads or tails?

Suppose Oriole's colleague is willing to handicap the bet by paying her $23 if the coin toss results in tails. If everything else remains the same, what are Oriole's expected cash flow and the variance of that cash flow?

Reference no: EM132908114

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