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Assume That One of Two Possible Outcomes Will Follow a Decision

Question 49

Multiple Choice

Assume that one of two possible outcomes will follow a decision. One outcome yields a $75 payoff and has a probability of 0.3; the other outcome has a $125 payoff and has a probability of 0.7. In this case the expected value is:


A) $85.
B) $60.
C) $110.
D) $35.

Correct Answer:

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