Refer to the information provided in Figure 17.1 below to answer the question(s) that follow. Figure 17.1
-Refer to Figure 17.1. John has two job offers when he graduates from college. John views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $50,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $60,000. John believes that he has a 50-50 chance of earning the bonus. What is the expected value of John's income for each job offer?
A) $50,000 for the first offer and $80,000 for the second offer
B) $50,000 for the first offer and $50,000 for the second offer
C) $50,000 for the first offer and $30,000 for the second offer
D) $25,000 for the first offer and $50,000 for the second offer

Question

Refer to the information provided in Figure 17.1 below to answer the question(s) that follow.  Figure 17.1
-Refer to Figure 17.1. John has two job offers when he graduates from college. John views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $50,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $60,000. John believes that he has a 50-50 chance of earning the bonus. What is the expected value of John's income for each job offer?
A) $50,000 for the first offer and $80,000 for the second offer 
B) $50,000 for the first offer and $50,000 for the second offer 
C) $50,000 for the first offer and $30,000 for the second offer 
D) $25,000 for the first offer and $50,000 for the second offer

Quizplus · Accepted Answer

The expected value for the first offer is straightforward at $50,000 since it's a fixed amount. For the second offer, the expected value is calculated as (0.5 * $20,000) + (0.5 * $80,000) = $10,000 + $40,000 = $50,000. Thus, both offers have an expected value of $50,000.

Refer to the Information Provided in Figure 17