Scenario: Health Costs Alan Is Hoping for a Healthy Year

Multiple Choice

Scenario: Health Costs Alan is hoping for a healthy year, meaning that he would have zero health costs.Given his habits, there is a 40% chance that Alan will develop a health issue that will result in $50,000 in health costs.Assume these are the only two conditions that could exist for Alan in the coming year.
(Scenario: Health Costs) Look at the scenario Health Costs.Given the fact that Alan has a 40% chance of developing a health problem, what is the expected value of Alan's health care costs for the coming year?

A) $0
B) $50,000
C) $20,000
D) $16,000