Consider the Following Scenario to Answer the Questions That Follow

question 95

Multiple Choice

Consider the following scenario to answer the questions that follow.
Suppose that in an experimental setting, 100 students are asked to choose between Gamble A and Gamble B, where:
Gamble A: The student will receive $50 with a 70% probability and $100 with a 30% probability.
Gamble B: The student will receive $50 with a 50% probability, $200 with a 25% probability, and $0 (nothing) with a 25% probability.
-What is the expected value (EV) of Gamble A?

• A) $0
• B) $100
• C) $50
• D) $45
• E) $65

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Definitions:

Inconsistency

Lack of consistency, uniformity, or agreement.

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Automations

The technology by which a process or procedure is performed with minimal human assistance, often improving efficiency and accuracy.

Equipment-based Service

A type of service that heavily relies on physical devices or machines to deliver value to customers.