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Cal Has Two Choices

Question 55
Multiple Choice

Cal has two choices.The first offers a 50% chance of winning $20 and a 50% chance of losing $20.The second option offers a 20% chance of winning $100 and an 80% chance of losing $20.Which choice has the larger expected value? A)Both choices have the same expected value,so Cal would be indifferent between the two options. B)The 50%-50% chance. C)Both choices have the same expected value but the 50%-50% is better because the chance of payoff is greater. D)The 20%-80% choice.

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Q 57
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