What is the expected value of the lottery

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Reference no: EM131246406

Harvery is faced with a lottery where he has a 25 percent chance of winning $10, a 25 percent chance of winning $30, and a 50 percent chance of losing $30.

a. What is the expected value of the lottery?

b. Will Harvey accept the lottery if he is risk neutral? (Possible answers: yes, no, indifferent, ambiguous)

c. Will Harvey accept the lottery if he is risk averse? (Possible answers: yes, no, indifferent, ambiguous)

d. Will Harvey accept the lottery if he is risk seeking? (Possible answers: yes, no, indifferent, ambiguous)

Reference no: EM131246406

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