Suppose that a person won the florida lottery and was, Ask an Expert

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Suppose that a person won the Florida lottery and was offered a choice of two prizes: (1) $500,000 or (2) a coin-toss gamble in which he or she would get $1 million if a head were flipped and zero if a tail.

a. What is the expected dollar return on the gamble?

b. Would the person choose the sure $500,000 or the gamble?

c. If he or she chooses the sure $500,000, is the person a risk averter or a risk seeker?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9867056

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