(Answered) Question sam has just paid 215 for a certificate that

Statistics

Question: Sam has just paid $215 for a certificate that allows him to call the flip of an "unfair" coin. If he calls it correctly, he will win $500. If he calls it incorrectly, he will win $0. His PTSP for the certificate is $315. The clairvoyant offers to tell him the outcome of the impending coin toss. What is Sam's PIBP for the clairvoyant's information? You do not know anything about Sam's risk attitude.

a. $185

b. Need Sam's M-curve to determine his PIBP for the information.

c. $285

d. Need Sam's M-curve and the probability he assigns to the "unfair" coin landing Heads (or Tails) to determine his PIBP for the information.

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