You have placed a wager such that you will either receive nothing if you lose the bet or you will receive $10 if you win the bet. If the expected cash receipt is $9, then there is a 100 percent probability that you will win the wager.

Question

Quizplus · Accepted Answer

If the expected cash receipt is $9 and the payoff for winning the bet is $10, then the probability of winning cannot be 100 percent. The expected value formula is: 
(expected payoff) x (probability of winning) + (payoff if you lose) x (probability of losing) = expected cash receipt 
In this case: 
$10 x (probability of winning) + $0 x (probability of losing) = $9 
Solving for probability of winning: 
probability of winning = $9/$10 = 0.9 or 90 percent. Therefore, the answer is false as the probability of winning is not 100 percent.

You Have Placed a Wager Such That You Will Either