Consider the Following Scenario When Answering the Following Questions

question 13

Multiple Choice

Consider the following scenario when answering the following questions:
Ivett and Desiree are considering playing a game called Twenties versus Fifties.In this game,Ivett will place a $20 bill on the table,and Desiree will place a $50 bill on the table.Both players will then toss a fair coin.If both Ivett and Desiree toss heads or if they both toss tails,Ivett wins the $70 on the table.If one woman tosses heads and the other tosses tails,Desiree wins the $70 on the table.
-Which of the following is the formula that Desiree would use to compute the expected value (EV ) of the game from her perspective?

• A) EV = 0.5 * ($20)+ 0.5 * ($50)
• B) EV = 0.5 * (-$20)+ 0.5 * ($50)
• C) EV = 0.5 *($20)+ 0.5 *(-$50)
• D) EV =0.5* (-$70)+ 0.5 * ($50)
• E) EV = 0.5 *($70)+ 0.5 * ($50)

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Definitions:

Revoke Offer

The withdrawal of a proposal by the offeror before it has been accepted by the offeree, rendering the offer void.

Formal Contract

An agreement under seal.

Signed and Sealed

A phrase indicating that a document has been formally executed with the signature of the parties involved and sometimes a physical seal.

Postbox Rule

A legal doctrine stating that an offer is considered accepted once the acceptance is posted, not when the offeror receives it.