You have inherited a lottery ticket may be a $10,000 winner. You have a 0.25 chance of winning the $10,000 and a 0.75 chance of winning $0. You have an opportunity to sell the lottery ticket for $2,500. What is your expected return and what should you do if are risk averse?

Question

Quizplus · Accepted Answer

The Answer of You have inherited a lottery ticket may be a $10,000 winner. You have a 0.25 chance of winning the $10,000 and a 0.75 chance of winning $0. You have an opportunity to sell the lottery ticket for $2,500. What is your expected return and what should you do if are risk averse?

You Have Inherited a Lottery Ticket May Be a $10,000