You Have Inherited a Lottery Ticket May Be a $10,000

question 29

Short Answer

You have inherited a lottery ticket may be a $10,000 winner. You have a 0.25 chance of winning the $10,000 and a 0.75 chance of winning $0. You have an opportunity to sell the lottery ticket for $2,500. What is your expected return and what should you do if are risk averse?

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Definitions:

Theory Y

A management theory holding that employees are self-motivated, seek responsibility, and can solve work problems creatively.

Expectancy Theory

A motivational theory suggesting that individuals are motivated to act in certain ways based on the expectation that their actions will lead to desired outcomes.