Calculate the expected value, Basic Statistics

Assignment Help:

Imagine you are faced with the opportunity to play two coin flips, in which you get to call heads or tails prior to the flip of a fair, two-sided coin.  (That is, heads and tails have equal likelihoods of occurring on any given flip.)

In Game A, a correct call wins you $1000; for an incorrect call, you neither win nor lose money.  Game A costs $0 to play.In Game B, a correct call wins you $10,000; an incorrect call loses you $3,000.  Game B costs $0 to play.

a.  What is the expected value of each game?

b.  If you had to play one of the two games, which would you choose and why?  Please answer this as realistically as you can, given your (and/or your group members') actual preferences, wealth, risk aversion, etc.  Do not answer this question for some hypothetical person.  Imagine that you, yourself, have been given this actual choice and must now make a decision.

c.   At what cost of your preferred game would you be indifferent between the two games?  How did you arrive at this number?

 


Related Discussions:- Calculate the expected value

Venn diagrams, how do i solve questions with venn diagrams

how do i solve questions with venn diagrams

Absorption distributions , Absorption distributions Probability distribu...

Absorption distributions Probability distributions which represent the number of 'individuals' (such as particles) which fail to cross the speci?ed area containing the hazards o

Cost behavior/classificationq, Shipping costs on Merchandise sold--it is a ...

Shipping costs on Merchandise sold--it is a variable cost, but is it a selling/adminstrative cost or product cost? Is it direct or indirect?

Probability, What is probability 0.10 called?

What is probability 0.10 called?

Replacement theory, who is the mathematician who invented replacement theor...

who is the mathematician who invented replacement theory of operation research

#title. .decision tree, Assume that you have a client that is a paper manuf...

Assume that you have a client that is a paper manufacturer and they have expressed concern that the government will pass a new regulation banning the use of chlorine-based technolo

Linear regression, Linear  regression is  a regression methods  that models...

Linear  regression is  a regression methods  that models  the  relationship  between  a dependent variable   independent variables ? X1 i = 1 .........p and a random term . the mod

Probebility., what is probebility? and how to solve the sums of this?

what is probebility? and how to solve the sums of this?

Science, #question how to make an electron dot diagram

#question how to make an electron dot diagram

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd