Consider a state lottery that has a weekly television show. On this show, a contestant receives the
Question:
Consider a state lottery that has a weekly television show. On this show, a contestant receives the opportunity to win \(\$ 1\) million. The contestant picks from four hidden windows. Behind each is one of the following: \(\$ 150,000, \$ 200,000\), \$1 million, or a "stopper."
a. Before beginning, the contestant is offered \(\$ 100,000\) to stop. Mathematically speaking, should the contestant take the \(\$ 100,000\) ?
b. Before beginning, the contestant is offered \(\$ 500,000\) to stop. Mathematically speaking, should the contestant take the \(\$ 500,000\) ?
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To answer these questions we need to evaluate the Expected Value EV The Expected Value is a concept ...View the full answer
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