What is the expected dollar return on the gamble

Reference no: EM131183596

Suppose that a person won the Florida lottery and was offered a choice of two prizes: (1) $500,000 or (2) a coin-toss gamble in which he or she would get $1 million if a head were flipped and zero for a tail.

a. What is the expected dollar return on the gamble?

b. Would the person choose the sure $500,000 or the gamble?

c. If he or she chooses the sure $500,000, is the person a risk averter or a risk seeker?

Reference no: EM131183596

Questions Cloud

What other interesting patterns do you notice : What other interesting patterns do you notice in the periodic table? What can you predict about the properties of elements in columns 1A, 2A, 6A, and 7A?

Who receives the collection of frogs : Abraham unseals his estimate of the value of the collection at $12,000.00. Bobby's estimate of the value of the collection is $6,000.00. Charlene values the collection at $9,000.00. Who receives the collection of frogs? What is each person's fair s..

Prepare an analysis of the organisations social media : Prepare a research report. -Select from a list of organisations and prepare an analysis of the organisation's social media presence and strategy.

The annual increase in selling price over this time period : In 2012, the average vehicle in the United States sold for $42,830. In 2002 (10 years earlier) the average selling price was $25,313. What was the annual increase in the selling price over this time period? 3.89 percent 4.20 percent 4.56 percent 5.01..

What is the expected dollar return on the gamble : Suppose that a person won the Florida lottery and was offered a choice of two prizes: (1) $500,000 or (2) a coin-toss gamble in which he or she would get $1 million if a head were flipped and zero for a tail.

Lewis theory to explain : Can you use the Lewis theory to explain why hydrogen, iodine, nitrogen, or oxygen exists as diatomic molecules?

What is the expected rate of return on the project : What type of risk does the standard deviation and CV measure?

Proteins are polymers of amino acids : Proteins are polymers of amino acids. Draw a general diagram of an amino acid. Describe three types of biological functions of proteins.

Desires to lease numerically controlled milling machine : The Jacobs company desires to lease a numerically controlled milling machine costing $200,000. Jacobs has asked both First Manufacters Bank Leasing Corporation and Commercial Associates, Inc to quote an annual lease rate. Both leasing companies now r..

User Account

All Pages