Scenario 5.1: Aline and Sarah Decide to Go into Business Together as Together

question 68

Multiple Choice

Scenario 5.1:
Aline and Sarah decide to go into business together as economic consultants. Aline believes they have a 50-50 chance of earning $200,000 a year, and that if they don't, they'll earn $0. Sarah believes they have a 75% chance of earning $100,000 and a 25% chance of earning $10,000.
-Refer to Scenario 5.1. The expected value of the undertaking,

• A) according to Sarah, is $75,000.
• B) according to Sarah, is $100,000.
• C) according to Sarah, is $110,000.
• D) according to Aline, is $200,000.
• E) according to Aline, is $100,000.

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