Question: Consider a lottery with three possible outcomes: $135 will be received with probability 0.2. $90 will be received with probability 0.3. $40 will be received




Consider a lottery with three possible outcomes: $135 will be received with probability 0.2. $90 will be received with probability 0.3. $40 will be received with probability 0.5. The expected value of the lottery is $ . (Round your answer to the nearest dollar.) The variance of the outcomes is $ . (Round your answer to the nearest dollar.) In order to play the lottery, a risk-neutral person would pay $ . (Round your answer to the nearest dollar.)Suppose an investor is concerned about a business choice in which there are three prospects; the probability and returns are given below: Probability Return 0.5 $110 0.4 30 0.1 - 20 The expected value of the uncertain investment is $ . (Round your answer to the nearest dollar.) The variance of the investment is $ . (Round your answer to the nearest dollar.)
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