Essay
Suppose a person must accept one of three bets:
A. 0.5 chance of winning $100 and 0.5 chance of losing $100.
B. 0.75 chance of winning $100 and 0.25 chance of losing $300.
C. 0.9 chance of winning $100 and 0.1 chance of losing $900. Show that all of these are fair bets.
Correct Answer:
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EV(A)= .5(100)+ .5(-...View Answer
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Correct Answer:
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