Katy Has an Ailing and Wealthy, but Miserly, Parent

question 165

Multiple Choice

Katy has an ailing and wealthy, but miserly, parent. The parent has told Katy that if she takes care of him until he dies, then she will get $100,000 in inheritance. Katy knows that there is only a 50-50 chance that her father will leave her the full amount or nothing. To take care of her father, she has to take a job that pays $30,000 where her current job pays her $70,000 per year. If her father is expected to pass away in 1 year, what is Katy's expected wealth if she takes care of her father?

• A) $130,000
• B) $90,000
• C) $80,000
• D) $70,000