Consider a game in which a coin will be flipped three times. For each heads you will be paid $100. Assume that the coin comes up heads with probability 2/3. Refer to table of the possibilities and probabilities in this game and answer the questions that follow. Possibilities 1 2. 3 4 Probability 1/27 4/27 4/27 4/27 2/27 2/27 2/27 8/27 Outcome heads, 3 tails 1 head, 2 tails 2 heads, 1 tail 3 heads, o tails 1 head, 2 tails 1 head, 2 tails 1 head, 2 tails 1 head, 2 tails 5 6 7 8 Instructions: Enter your responses rounded to the nearest whole dollar. a. Compute the expected value of the game. The expected value of the game is $ b. How much would you be willing to pay to play this game? A person who is risk averse will want to pay less than $ a person who is risk-neutral will be willing to pay $ C. Consider the effect of a change in the game so that if tails comes up two times in a row, you get nothing. These changes are reflected in the table below. Calculate the payoff for each possibility. Possibilities 1 Probability 1/27 Payoff 2 2 2/27 $ 3 2/27 $ 4 2/27 $ Outcome 3 tails, heads tails, heads, tails tails, tails, heads heads, tails, tails heads, heads, tails heads, tails, heads tails, heads, heads 3 heads, o tails 5 4/27 6 4/27 $ 7 4/27 8 8/27 $ $ New expected value = $ A person who is risk-averse will want to pay less than $ : a person who is risk-neutral will be willing to pay $