Expected Value

Question 1

This game is favorablefairunfavorable.

Revolt · Accepted Answer

favorable

Question 2

The expected value of investment B is $.

Revolt · Accepted Answer

21000

Question 3

The expected value of the number of points for one roll is:

Revolt · Accepted Answer

0

Question 4

This game is .

Revolt · Accepted Answer

favorable

Question 5

The expected value of investment B is $.

Revolt · Accepted Answer

21,000

Question 6

Which of the following did your solution include?

Revolt · Accepted Answer

P = $240,000 – $196,000 = $44,000.; The expected value is a weighted average of each possible value weighted by its probability.; EV = ($44,000)(0.75) + ($–196,000)(0.25) = $–16,000.; The expect average profit is $–16,000.; The company should not make the product.

Question 7

Based on the expected value, you should make .

Revolt · Accepted Answer

investment B

Expected Value Answers

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