]Risk AversionSuppose that, when an individual gets D dollars, we define their payoff to be D in order to model their level of risk-aversion. Consider agamble that pays $1,000 with probability 0.64, and $0 with probability 0.36.What is the expected value of this gamble? E [gamble] =$ 640IThis individual would be indifferent between the gamble and receiving $ 640would be willing to pay up to $0with certainty, implying that theyto avoid the risk associated with the gamble (meaning, they would be willing topay up to this amount to receive the expected value of the gamble with certainty).Hint: graphing the re-scaled payoff and expected value of the gamble will really help you think through this question (see the Ch. 19Part 2 Lecture and Practice Application 6 videos for examples of these graphs and their interpretations).

Ans. ) Given the question is related to the concept of risk aversion. Risk aversion is defined as…

Answered: ] Risk Aversion Suppose that, when an…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Part 2 of 2 (b) Is it an expected gain or an expected loss? Round the answer to two decimal places. This is an expected gain/loss of S
R1
Does it pay to ask for a raise? A national survey of heads of households showed the percentage of those who asked for a raise and the percentage who got one. According to the survey, of the women interviewed, 26% had asked for a raise, and of those women who had asked for a raise, 45% received the raise. If a woman is selected at random from the survey population of women, find the following probabilities. (Enter your answers to three decimal places.) (a) P(woman asked for a raise)(b) P(woman received raise, given she asked for one)(c) P(woman asked for raise and received raise)
1 In the game of roulette, a player can place a $10 bet on the number 31 and have a o probability of winning. If the metal ball lands on 31, the player gets to keep the $10 paid to play the game and the player is awarded an additional $350. Otherwise, the player is awarded nothing and the casino takes the player's $10. Find the expected value E(x) to the player for one play of the game. If x is the gain to a player in a game of chance, then E(x) is usually negative. This value gives the average amount per game the player can expect to lose. The expected value is $. (Round to the nearest cent as needed.) In Question Viewer
How many different selections are possible? What is the probability of winning? If you win, what is your net profit? Find the expected value.
Question Help ▼ Suppose a life insurance company sells a $230,000 one-year term life insurance policy to a 25-year-old female for $320. The probability that the female survives the year is 0.999646. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? O A. The insurance company expects to make an average profit of $29.08 on every 25-year-old female it insures for 1 month. O B. The insurance company expects to make an average profit of $319.89 on every 25-year-old female it insures for 1 year. O C. The insurance company expects to make an average profit of $238.58 on every 25-year-old female it insures for 1 year. O D. The insurance company expects to make an average profit of $21.69 on every 25-year-old female it insures for 1 month. Click to select your answer(s).
Payoffs in this lottery are given by the following: p(x) $100 .15 $60 .25 $20 .10 $10 .30 $40 .20 a) Find this lottery's expected value b) Find the probability that a person will win more than $20.
11.8.3 The table shows claims and their probabilities for an insurance company. Use the table to answer parts a through c. Amount of claim (to the nearest $50,000) Probability $0 0.65 $50,000 0.23 $100,000 0.05 $150,000 0.04 $200,000 0.02 $250,000 0.01 a.Calculate the expected value. $_______
Consider the following table: Value of X Probability -3 0.2 -1 d 2 0.4 3 0.2 1. What is the value of d? 2. Find the expected value of X?
In the game of roulette, a player can place a $6 bet on the number 11 and have a ag probability of winning. If the metal ball lands on 11, the player gets to keep the $6 paid to play the game and the player is awarded an additional $210. Otherwise, the player is awarded nothing and the casino takes the player's $6. Find the expected value E(x) to the player for one play of the game. If x is the gain to a player in a game of chance, then E(x) is usually negative. This value gives the average amount per game the player can expect to lose. The expected value is $ (Round to the nearest cent as needed.)
An estimator is "______" if its expected value equals the population parameter of interest.

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