Suppose you won the lottery and had two options: (1) receiving $0.3 million or (2) taking a gamble in which, at the flip of a coin, you receive $0.6 million if a head comes up but receive zero if a tail comes up. a. What is the expected value of the gamble? Enter your answer in millions. For example, an answer of $500,000 should be entered as 0.5. Round your answer to one decimal place. million $ b. Would you take the sure $0.3 million or the gamble? -Select- c. If you chose the sure $0.3 million, would that indicate that you are a risk averter or a risk seeker? -Select- d. Suppose the payoff was actually $0.3 million-that was the only choice. You now face the choice of investing it in a U.S. Treasury bond that will return $321,000 at the end of a year or a common stock that has a 50-50 chance of being worthless or worth $750,000 at the end of the year. 1. The expected profit on the T-bond Investment is $21,000. What is the expected dollar profit on the stock Investment? Round your answer to the nearest dollar. $ 2. The expected rate of return on the T-bond investment is 7%. What is the expected rate of return on the stock Investment? Round your answer to the nearest whole number. % 3. Would you invest in the bond or stock? -Select- 4. Exactly how large would the expected profit (or the expected rate of return) have to be on the stock investment to make you invest in the stock, given the 7% return on the bond? Round your answer to the nearest whole number. If no exact answer can be obtained, enter 0. 5. How might your decision be affected if, rather than buying one stock for $0.3 million, you could construct a portfollo consisting of 100 stocks with $3,000 invested in each? Each of these stocks has the same return characteristics as the one stock-that is, a 50-50 chance of being worth zero or $7,500 at year-end. I. Investing in a portfolio of stocks would definitely be a deterioration over investing in the single stock. II. Investing in a portfolio of stocks would definitely be an improvement over investing in the single stock. III. The situation would be unchanged. -Select- ▼ Would the correlation between returns on these stocks matter? -Select- v

Trevor is interested in purchasing the local hardware/sporting goods store in the small town of Dove Creek, Montana. After examining accounting records for the past several years, he found that the store has been arossina over $850 per day about 55% of the business days it is open. Estimate the probability that the store will aross over $850 for the following. (Round your answers to three decimal places. (a) at least 3 out of 5 business davs (b) at least 6 out of 10 business days (c) fewer than 5 out of 10 business days (d) fewer than 6 out of the next 20 business days (e) more than 17 out of the next 20 business days

(cash prize, $) Grand prize P(x) For a multistate lottery, the following probability distribution represents the cash prizes of the lottery with their corresponding probabilities. Complete parts (a) through (c) below. 0.00000000687 200,000 0.00000034 10,000 100 0.000001846 0.000146681 0.004408777 4 0.007671659 0.01847131 0.96929938013 3

Suppose best buy offers an extended warranty for $25 on an electronic device whose value is $250. Suppose best buy estimates the probability the item will be returned for a claim on that warranty is 5%. Assume that if an item is returned, best buy will refund the $250 purchase price. What is best buys expected value on the warranty?

Suppose you pay $10 to roll a fair die with the understanding that you will get back $17 for rolling a 1 or a 2, nothing otherwise. What is your expected value?  Round to the nearest cent.  In your response do not use any words or symbols (i.e. $).

A test has three parts. Part A consists of seven true-false questions, part B consists of three multiple-choice questions with five choices each, and part C requires you to match three questions with three different answers one-to-one. Assuming that you make random guesses in filling out your answer sheet, what is the probability that you will earn 100% on the test? (Leave your answer as a formula.) P(E) O P(E) O P(E) = P(E) = P(E) = = = 1 7² x 5³ x 3! 1 27 x 5³ x 3! 1 3² x 53 1 2³ x 35 x 7! x 7! 1 23 x 75 x 3!

Suppose you like to keep a jar of change on your desk. Currently, the jar contains the following: 18 Pennies 14 Dimes 18 Nickels 9 Quarters     What is the probability that you reach into the jar and randomly grab a quarter and then, without replacement, a penny? Express your answer as a fraction or a decimal number rounded to four decimal places.