If When a Coin Is Tossed the Observance of a Head

question 118

Multiple Choice

If when a coin is tossed the observance of a head rewards you with a dollar and the observance of a tail costs you fifty cents, how much would you expect to gain after twenty tosses?

• A)$5.00
• B)$7.50
• C)$10.00
• D)$15.00 Expected return = 20 x [($1.00 x .5) - (.50 x .5)]
• = 20 x ($.25)

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Definitions:

Accounts Payable

Liabilities or amounts owed by a business to its creditors for goods and services that have been received but not yet paid for.

Accounts Receivable

Financial obligations of customers to a firm for items or services rendered but not yet compensated.

Face Value

Refers to the nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its legal value.

Bond

An interest-bearing security that obligates the issuer to pay the bondholder a specified sum of money, generally at fixed intervals, and to repay the principal at maturity.