Multiple Choice
Suppose a family has saved enough for a 10 day vacation (the only one they will be able to take for 10 years) and has a utility function U = V1/2 (where V is the number of healthy vacation days they experience) .Suppose they are not a particularly healthy family and the probability that someone will have a vacation ruining illness (V = 0) is 30%.What is the expected value of V?
A) 10
B) 7
C) 3
D) 0
Correct Answer:
Verified
Correct Answer:
Verified
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