If an investment offered an expected payoff of $100 with $0 variance, you would know that:
A) half of the time the payoff is $100 and the other half it is $0.
B) the payoff is always $100.
C) half of the time the payoff is $200 and the other half it is $0.
D) half of the time the payoff is $200 and the other half it is $50.

Question

Quizplus · Accepted Answer

If the investment has an expected payoff of $100 and $0 variance, it means that the payoff is always $100, no matter what the circumstances are. Therefore, the correct answer is B.

If an Investment Offered an Expected Payoff of $100 with $0