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What is the expected value of the gamble

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Suppose you won the Texas lottery and were offered a choice of $1,000,000 in cash or a gamble in which you would get $2,000,000 if a head were flipped but $0 if a tail came up. Show your work.

a. What is the expected value of the gamble?

b. Would you take the sure $1,000,000 or the gamble?

c. If you choose the sure $1,000,000, are you a risk averter or a risk seeker?

Reference no: EM132491399

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