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 an investment has a $0 variance, it means that the expected payoff is always the same, and there is no chance of any other outcomes occurring. Therefore, the option that states the payoff is always $100 is the correct choice.

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