Which of the Following Chances Has the Biggest Expected Return

question 35

Multiple Choice

Which of the following chances has the biggest expected return?

• A) a 40% chance of winning $200 and a 60% chance of winning $0
• B) a 100% chance of getting $100
• C) a 50% chance of winning $200, 30% chance of winning $400 and a 20% chance of losing $400
• D) All of the above have the same expected return.

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Definitions:

Continuity/Discontinuity

A fundamental issue concerning the process of development that addresses the extent to which development tends to be continuous, consisting of the gradual accumulation of small changes, and the extent to which it is discontinuous, involving a series of abrupt, radical transformations.

Development

The process of growth or progress, often marked by a series of changes or stages, in the context of individuals, societies, or organisms.

Gradual

describes a process happening in small degrees, steps, or stages over a period, rather than suddenly.

Continuous Process

An operation or production system where input materials are continuously fed and processed, resulting in a continuous output.