Scenario 5.2: Randy and Samantha Are Shopping for New Cars (One Each)

question 65

Multiple Choice

Scenario 5.2:
Randy and Samantha are shopping for new cars (one each) . Randy expects to pay $15,000 with 1/5 probability and $20,000 with 4/5 probability. Samantha expects to pay $12,000 with 1/4 probability and $20,000 with 3/4 probability.
-Refer to Scenario 5.2. Which of the following is true?

• A) Randy has a higher expected expense than Samantha for the car.
• B) Randy has a lower expected expense than Samantha for the car.
• C) Randy and Samantha have the same expected expense for the car, and it is somewhat less than $20,000.
• D) Randy and Samantha have the same expected expense for the car: $20,000.
• E) It is not possible to calculate the expected expense for the car until the true probabilities are known.