Two Slot Machines Offer to Double Your Money 3 Times

question 60

Multiple Choice

Two slot machines offer to double your money 3 times out of 5. Machine A takes $10 bets and Machine B takes $100 bets on each occasion. A risk-averse investor prefers to bet on ________.

• A) Machine A
• B) Machine B
• C) does not matter
• D) none of the above

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Definitions:

Prevention

Actions or measures taken to stop something undesirable from happening, such as illness, error, or conflict.

Substitution

The act of replacing one element or factor with another, often in economic, mathematical, or chemical contexts.

Coping With Uncertainty

Refers to strategies and mechanisms individuals or organizations employ to manage and mitigate the stress or challenges brought about by uncertain situations or environments.

Visibility

The degree to which an individual's actions, contributions, or status within an organization are recognized and noticed by others.