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:

Linguistic Relativity Hypothesis

The theory that the structure of a language influences its speakers' worldview or cognition.

Benjamin Lee Whorf

An American linguist and fire prevention engineer known for his ideas on linguistic relativity, the hypothesis that language influences thought.

Noam Chomsky

An American linguist, philosopher, cognitive scientist, historian, social critic, and political activist known for his theory of generative grammar and criticism of behaviorism.

Ironic Statements

Expressions that usually mean the opposite of what they say, often used for humorous or emphatic effect.