Consider a Lottery with Four Possible Outcomes, A, B, C $P ( A ) = 0.40$

question 35

Multiple Choice

Consider a lottery with four possible outcomes, A, B, C, and D. The associated payoffs are: A - $10, B - $30, C - $70, and D - $150. The probabilities are $P ( A ) = 0.40$ , $P ( B ) = 0.20$ , $P ( C ) = 0.30$ , and $P ( D ) = 0.10$ . The variance of this lottery is

• A) 912
• B) 1,824
• C) 1,618
• D) 3,326

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