Sarah Buys Little Stuffed Animals for $5 Each

Multiple Choice

Sarah buys little stuffed animals for $5 each. They come in different varieties. If the producer stops making (retires) a certain variety, a stuffed animal of that variety will be worth $100; otherwise it is worth $0. There is 50% chance that any variety will be retired. When Sarah buys her next stuffed animal, the expected value is

A) $50.
B) $47.50.
C) $45.00.
D) $0.