What is the expected value of this gamble

Assignment Help Business Economics

Reference no: EM133327957

Question: You are offered the following gamble based coin flips. if the first head occurs on the first flip, you get $2. if the first head occurs on the second flip you get $4, and so on, so that if the first head is on the Nth flip you get $2N. the game ends only when you flip of the coin results in heads. What is the expected value of this gamble? when offered, most people say they would only pay less than $10 to play this game. what are two reasons why people are willing to pay so much less than the expected value?

Reference no: EM133327957

Questions Cloud

Development of christianity in the roman empire : Identify the similarities and differences between the development of Christianity in the Roman Empire and the development of Buddhism in China.

In future development of kejimkujik national : In the future development of Kejimkujik National and Historical Park, are there any issues they must overcome, challenges or opportunities?

How is sustainability affected by the presence of economies : What is the difference between a ?ve-forces analysis and an analysis of competitive-advantage sustainability? How is sustainability affected by the presence

Why did the world suffer through world war : If World War 1 was to be the war to end all wars, why did the world suffer through World War 2 and 100+ years of subsequent wars?

What is the expected value of this gamble : What is the expected value of this gamble? when offered, most people say they would only pay less than $10 to play this game. what are two reasons

Assyrians and persians controlled their empires : Discuss of different ways in which the Assyrians and Persians controlled their empires.

How does chasteen define nationalism : How does Chasteen define "Nationalism"? Is it a rebellion against colonial ideas about economics, race and identity?

Canadian government act to intern enemy aliens : Why did Prime Minister Borden's Canadian government act to intern "enemy aliens"?

What are mass politics : What are "mass politics," and how did they change political life across Europe at the turn of the 20th century?

User Account

All Pages