Answer:
Step-by-step explanation:
It's too bad about this problem. It's a fair game if you get paid the same amount that you have to pay if you lose.
You win 2 ways
- H - H
- T - T
- Probability 1/2
You lose 2 ways.
- H - T
- T - H
- Probability 1/2
Expectation
E = 1/2 * 3 - 1/2 * 4
E = 1.5 - 2
E = -0.5
Which means that you should expect to lose 0.5 dollars every time you play this dreadful game.
Savings account100 shares x $9.75 = $975, then multiplied by 0.045 will result to $43.89.
Stock100 shares x $9.75 = $975, then multiplied by 0.08 will result to $78.00.
So, the difference between your stocks and savings account by end of the year is $34.11 ($78.00 deducted by $43.89).Your stock is gaining higher APR by $34.11 than what's calculated in your savings account.
