Suppose Dean has $500 and he wants to maximize his expected benefit, ,where X is his resources in dollars.There are two companies he could invest in: Dog Gone Salon,which has a payoff of $1,000 with 50% probability and $0 with 50% probability and Pretty Kitty Grooming,which has a payoff of $2,000 with 50% probability and $0 with 50% probability.Dean's expected payoff from investing in Dog Gone Salon only is
A) $1,000
B) $500
C) $0
D) $1,500

Question

Suppose Dean has $500 and he wants to maximize his expected benefit,  ,where X is his resources in dollars.There are two companies he could invest in: Dog Gone Salon,which has a payoff of $1,000 with 50% probability and $0 with 50% probability and Pretty Kitty Grooming,which has a payoff of $2,000 with 50% probability and $0 with 50% probability.Dean's expected payoff from investing in Dog Gone Salon only is
A) $1,000 
B) $500 
C) $0 
D) $1,500

Quizplus · Accepted Answer

The Answer of Suppose Dean has $500 and he wants to maximize his expected benefit,  ,where X is his resources in dollars.There are two companies he could invest in: Dog Gone Salon,which has a payoff of $1,000 with 50% probability and $0 with 50% probability and Pretty Kitty Grooming,which has a payoff of $2,000 with 50% probability and $0 with 50% probability.Dean's expected payoff from investing in Dog Gone Salon only is
A) $1,000 
B) $500 
C) $0 
D) $1,500

Suppose Dean Has $500 and He Wants to Maximize His