Part 1 (3 points) Seet You have an eight-sided fair die. You can roll the die...

Question

Question

Answer 1

Answer #1

1) Solution: 12.5

Working: The expected value of rolling the die is computed by multiplying 1/8 with 100 = 12.5

2) Solution: You take the sure $7.50 if you are risk taker

Explanation: As a risk-taker person, you select to take the sure thing over the lower expected value

> 2) You would take it if you are risk AVERSE
(Risk-averse people: those who prefer a sure thing over a gamble with a higher expected value)

Emma Barber Wed, Nov 10, 2021 11:27 AM

Answer 2

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