Micah Is Considering Turning Pro Before His Graduating Year Basketball

question 6

Multiple Choice

Micah is considering turning pro before his graduating year basketball season.If he turns pro,Micah expects a pro contract worth $2 million in present value.If he does not turn pro,there is a 50% chance an injury will prevent him from playing professionally and a 50% chance he will get a pro contract worth $4 million in present value.What is the expected present value of Micah's pro contract if he stays in university for his graduating year?

• A) $3.5 million
• B) $5 million
• C) $2 million
• D) $0

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