Business, 09.02.2021 05:40 fatherbamboo

Lottery – Let $1,000 be your current wealth. There are 100 people and each buys a lottery ticket at $5. The administrative cost of the lottery ticket per person is $5. If you win the lottery, you will get $500. There is only one person who can win the lottery. a. Define the gamble b. Calculate the expected value of the gamble c. Is this gamble favorable, fair, or unfavorable? d. Now, suppose your utility function is U = W5/2. Calculate the Certainty Equivalent and the maximum lottery price you are willing to pay. e. Now suppose that there are only 50 individuals participating in the lottery. Without calculating all the math again, what happens to the maximum price for the lottery you are willing to pay? Does it increase, decrease, or stay the same?

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 09:00

Asap describe three different expenses associated with restaurants. choose one of these expenses, and discuss how a manager could handle this expense.

Answers: 1

Answer

Business, 22.06.2019 19:50

Ichelle is attending college and has a part-time job. once she finishes college, michelle would like to relocate to a metropolitan area. she wants to build her savings so that she will have a "nest egg" to start her off. michelle works out her budget and decides she can afford to set aside $9090 per month for savings. her bank will pay her 4 %4% per year, compounded monthly, on her savings account. what will be michelle's balance in five years?

Answers: 3

Answer

Business, 23.06.2019 00:20

Firms like papa john’s, domino’s, and pizza hut sell pizza and other products that are differentiated in nature. while numerous pizza chains exist in most locations, the differentiated nature of these firms’ products permits them to charge prices above marginal cost. given these observations, is the pizza industry most likely a monopoly, perfectly competitive, monopolistically competitive, or an oligopoly industry?

Answers: 1

Answer

Business, 23.06.2019 22:00

what certification program, sponsored by isc2, requires knowledge of digital forensics, malware analysis, incident response, e-discovery, and other disciplines related to cyber investigations?

Answers: 1

Answer

You know the right answer?

Lottery – Let $1,000 be your current wealth. There are 100 people and each buys a lottery ticket at...

Questions