If an Individual Has a 90% Chance of Having $10,000

question 12

Multiple Choice

If an individual has a 90% chance of having $10,000 in wealth and a 10% chance of having only $9,000 because of a payout for medical care, what is the expected value of wealth of the individual?

• A) $9,500
• B) $9,900
• C) $9,000
• D) $9,600