Provide an Appropriate Response $1 / 36$ Probability of Winning $85 and a 35/36 Probability of Losing

question 120

Multiple Choice

Provide an appropriate response.
-In a game, you have a $1 / 36$ probability of winning $85 and a 35/36 probability of losing $4. What is your expected value?

• A) $2.36
• B) -$3.89
• C) $6.25
• D) -$1.53

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Definitions:

Flood Control System

Engineering and planning efforts designed to manage water flow and protect areas from flooding.

Expected Loss

The anticipated amount of loss in an investment, calculated as the probability of the loss occurring multiplied by the amount of the potential loss.

Coastal Town

A town located on or near a coast, often characterized by its relationship to the ocean and its impact on the local economy and culture.

Moral Hazard Problem

A situation in which one party engages in risky behavior knowing that it is protected against the consequences, usually by insurance or other safety nets.