Multiple Choice
Micah is considering turning pro before his senior basketball season.If he turns pro, Micah expects a pro contract worth $2 million in present value.If he does not turn pro, there is a 50% chance an injury will prevent him from playing professionally and a 50% chance he will get a pro contract worth $4 million in present value.What is the expected present value of Micah's pro contract if he stays in college for his senior year?
A) $3.5 million
B) $5 million
C) $2 million
D) $0
Correct Answer:
Verified
Correct Answer:
Verified
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