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never [62]
3 years ago
6

Saint Petersburg Gambles - You are offered the following gamble based on coin flips. If the first heads occurs on the first flip

, you get $2. If the first heads occurs on the second flip you get $4, and so on so that if the first head is on the Nth flip, you get $2N. The game continues until there is a heads. What is the expected value of this gamble? When offered, most people say they would only pay less than $10 to play this game. What are two reasons why people are willing to pay so much less than the expected value?
Business
1 answer:
makkiz [27]3 years ago
8 0

Answer:

The first reason why people are willing to pay so much less or lower than the expected value is due to the uncertainty of flipping a heads. Heads may never be flipped.

The Second reason they are willing to pay so much less or lower is because the expected value will rarely reach over $10 because player would have to make it to the 5th flip in order to recoup their investment in which most of the players are unwilling and ready to take that risk.

Explanation:

Saint Petersburg Gambles

The first reason why people are willing to pay so much less or lower than the expected value is due to the uncertainty of flipping a heads. Heads may never be flipped.

The Second reason they are willing to pay so much less or lower is because the expected value will rarely reach over $10 because player would have to make it to the 5th flip in order to recoup their investment in which most of the players are unwilling and ready to take that risk.

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Two factory plants are making TV panels. Yesterday, Plant A produced twice as many panels as Plant B. Two percent of the panels
Aleksandr [31]

Answer:

Production plant B= 187

Explanation:

Giving the following information:

Two factory plants are making TV panels. Yesterday, Plant A produced twice as many panels as Plant B.

Total prduction= 560 panels.

A= 2*b

Total production= 2b + b

560=3b

b= 186.67= 187

A= 373.34= 373

5 0
3 years ago
Cheryl bought her home three years ago for $217,000. Assuming her home appreciated at the 3% rate typical of her current market,
Setler79 [48]

Answer:

$237,121.76

Explanation:

Compounding is the computation of the future value of a present amount while the opposite of compounding which is the determination of a present value of a future amount is discounting. the relationship between present and future value is given as

Fv = Pv (1 + r)^n

where

Fv = future value

Pv = Present value

n = time

r = rate

Fv = 217000(1 + 0.03) ^3

= $237,121.76

The worth of the home purchased 3 year ago now is $237,121.76

5 0
3 years ago
Assume you have a property insurance contract which includes an 80% coinsurance provision. The insured building is worth $5,000,
BaLLatris [955]

Answer:

$1,500,000

Explanation:

in order for the insurance company to pay for all the damages, you should have purchased a policy that covered $4,000,000 in damages. Since the policy only covers $3,000,000, the insurance company will pay:

($3,000,000 / $4,000,000) x $2,000,000 (loss) = 0.75 x $2,000,000 = $1,500,000

3 0
3 years ago
You should indicate that you are available for an interview in which part of a cover letter?
nlexa [21]

Answer: NOT the second paragraph

Explanation: ed 2021

7 0
2 years ago
Read 2 more answers
Wells Company's delivery truck, which originally cost $70,000, was destroyed by fire. At the time of the fire, the balance of th
beks73 [17]

Answer:

D) $17,500 gain.

Explanation:

Wells Company should record the following transactions:

  • Dr  Cash account 40,000
  • Dr Accumulated Depreciation Vehicles account 47,500
  • Cr Vehicle account 70,000
  • Cr Gain on Disposal account 17,500

$40,000 in cash was received and the accumulated depreciation balance should equal to zero, therefore they must be debited.

The vehicles account balance should equal zero and the rest is gain on disposal, therefore they must be credited.

4 0
3 years ago
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