Consider two options: (A) you receive a guaranteed payment of $100; (B) a coin is tossed and if heads comes up, you win nothing; if tails comes up, you win $200. The expected payoff for option B is:
A)$200
B)$100
C)$300
D)$75
E)There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

The expected payoff for option B is calculated as the average of the outcomes, which is (0 + 200) / 2 = $100.

Consider Two Options: (A) You Receive a Guaranteed Payment of $100;