Question: Blossom made a friendly wager with a colleague that involves the result from flipping a coin. If heads comes up, Blossom must pay her colleague
Blossom made a friendly wager with a colleague that involves the result from flipping a coin. If heads comes up, Blossom must pay her colleague $19; otherwise, her colleague will pay Blossom $19. What is Blossoms expected cash flow, and what is the variance of that cash flow if the coin has an equal probability of coming up heads or tails? (Round answers to 2 decimal places, e.g. 52.75.)
Expected cash flow: $____
Expected floe variance: _____
Suppose Blossoms colleague is willing to handicap the bet by paying her $24 if the coin toss results in tails. If everything else remains the same, what are Blossoms expected cash flow and the variance of that cash flow?
Expected cash flow: $____
Expected floe variance: _____
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