A detective determines that he has a one in three chance of recovering stolen property. His out-of-pocket expenses for each investigation are $2,500 and he is paid his fee only when he recovers the stolen property. What should he charge his clients in order to break even? Using expected value, the detective must charge his clients $2,500 just to break even. Using expected value, the detective must charge his clients $8,500 just to break even. Using expected value, the detective must charge his clients $15,000 just to break even. Using expected value, the detective must charge his clients $6,500 just to break even. Using expected value, the detective must charge his clients $11,500 just to break even. O Using expected value, the detective must charge his clients $7,500 just to hreak ovon

A detective determines that he has a one in three chance of recovering stolen property. His out-of-pocket expenses for each investigation are $2,500 and he is paid his fee only when he recovers the stolen property. What should he charge his clients in order to break even? Using expected value, the detective must charge his clients $2,500 just to break even. Using expected value, the detective must charge his clients $8,500 just to break even. Using expected value, the detective must charge his clients $15,000 just to break even. Using expected value, the detective must charge his clients $6,500 just to break even. Using expected value, the detective must charge his clients $11,500 just to break even. O Using expected value, the detective must charge his clients $7,500 just to hreak ovon

Name: A detective determines that he has a one in three chance of recoverin
Uploaded: 2024-03-20T07:06:41.000Z
Channel: Bartleby
Description: A detective determines that he has a one in three chance of recoveringstolen property. His out-of-pocket expenses for each investigation are$2,500 and he is paid his fee only when he recovers the stolen property.What should he charge his clients in

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Similar questions

You have inherited a lottery ticket which might be a $10,000 winner. You have a 0.25 chance of winning the $10,000 and a 0.75 chance of winning $0. You have an opportunity to sell the lottery ticket for $2,500 - What is your expected return and what should you do if are risk averse?
Suppose that you just bought a painting for $1million. You plan to sell it exactly one year fromnow. You don’t know what the exact price will bewhen you sell. Nevertheless, you believe thatthere’s a 65% chance that you can sell it for$1.2million, and a 35% chance that you can sell itfor only $900,000. What is your expected gain orloss for this investment?
A game costs $1 to play where you win $5 when a coin lands on heads but lose $6 when a coin lands on tails. Calculate the expected payoff to the nearest cent, being sure to show all work.
Charlie buys a one-year term home insurance policy for $p, that will pay $200,000 in the event of a major catastrophe and $35,000 in the event of a minor catastrophe. Charlie's home has a 0.2% chance of a major catastrophe and a 0.7% of a minor catastrophe during the one year term. What did the insurance company charge Charlie for this policy if the company expected to break even?
A lottery offers one $2000 prize, one $900 prize and five $200 prizes.One thousand tickets are sold at $5 each. Find the expectation if a person buys oneticket.
You have inherited a lottery ticket that may be a $5,000 winner. You have a 35% chance of winning the $5,000 and a 65% chance of winning $0. You have an opportunity to sell the lottery ticket for $1,500. What is your expected return and what should you do if are risk neutral?
It is the beginning of September and you have been offered the following deal to go heli-skiing. If you pick the first week in January and pay for your vacation now, you can get a week of heli-skiing for $2,900. However, if you cannot ski because the helicopters cannot fly due to bad weather, there is no snow, or you get sick, you do not get a refund. There is a 30% probability that you will not be able to ski. If you wait until the last minute and go only if you know that the conditions are perfect and you are well, the vacation will cost you $4,600. You estimate that the pleasure you get from heli-skiing is worth $6,700 per week to you (if you had to pay more than that, you would choose not to go). If your cost of capital is 11% per year, should you book ahead or wait? You should because the NPV of this choice is $ book ahead wait (Round to two decimal places.)
An option to buy a stock is priced at $150. If the stock closes above 30 next Thursday, the option willbe worth $1000. If it closes below 20, the option will be worth nothing, and if it closes between 20and 30, the option will be worth $200. A trader thinks there is a 50% chance that the stock will closein the 20-30 range, a 20% chance that it will close above 30, and a 30% chance that it will fall below20. a) Create a valid probability table.b) How much should the trader expect to gain or lose?c) Should the trader buy the stock? Why?
Suppose 25% of workers in a market are willing to work for $55.000 and 75% of workers are willing to work for $63,000. The expected benetit of searching (interviewing) another worker equals S
Chandler offers you the opportunity to play his $2 game where he shuffles four cards and you must pick the correct one. What is the expected profit per person if the prize is a $1.25 coke for the game?Single line text.
You toss a coin three times. If you toss heads exactly two times, you win $2. If you toss heads all three times, you win $8. Otherwise, you lose $3. What is the expected payout for one round of this game? Round your answer to the nearest cent. Enter an expected loss as a negative number.