Suppose That You Face a Gamble That Has a Payoff

question 13

Multiple Choice

Suppose that you face a gamble that has a payoff of $1000 with probability 0.2 and a payoff of $200 with probability 0.8.I approach you to sell you insurance with a premium of p and a benefit of

• A)p=8, b=10
• B)p=400, b=500
• C)p=720, b=900
• D)(a) and (b) are actuarily fair
• E)(a) and (c) are actuarily fair
• F)(b) and (c) are actuarily fair
• G)All of the above.
• H)None of the above.

---

Definitions:

Down Syndrome

A genetic disorder caused by the presence of all or part of a third copy of chromosome 21.

Physical Development

The biological process that occurs in human beings over time, including growth and changes in the body structure and function.

Developmental Delay

A condition where a child does not reach their developmental milestones at the expected times.

Functional Status

An individual's ability to perform normal daily activities required to meet basic needs, fulfill usual roles, and maintain health and well-being.