Respuesta :
A fair bet is one with an expected value is zero. So, a bet say, you win $3 if a toss of a fair coin turn up with head face, whereas you loose $3 , if it turned up to be tail. Now here since it's a fair coin, probability of both the outcome is equal, expected outcome = 0.5*3 + 0.5*(-3) = 0
Expected outcome in this case = gain if the company succeed* probability that company succeed + loss if the company do not succeed* probability that company do not succeed.
= (Willingness to pay - the actual payment made) * 0.8 + (-100) *0.2 = 25*0.8- 0.2* 100 = 0
Hence, it's a fair bet.
A person is risk averse if he never accepts a fair bet. This is the defining characteristics of a risk averse individual.
A risk averse individual does not take this bet.
Expected Outcomes are statements that describe what we expect. participants/customers/learners to learn and achieve. • Describe the changes that will occur at a programmatic/operational level. • Expected outcomes describe what we expect the. program/department/office to achieve and produce.
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