The graph to the right shows the distribution of outcomes for two investment opportunities; Opportunity A in red and Opportunity B in blue. Which opportunity has the lowest risk? Which has the highest expected payoff? OA. B has the lowest risk, but A has the highest expected payoff OB. A has the lowest risk and highest expected payoff OC. A has the lowest risk, but B has the highest expected payoff D. B has the lowest risk, and both have the same expected payoff. OE B has the lowest risk and highest expected payoff OF. A has the lowest risk, and both have the same expected payoff.

The graph to the right shows the distribution of outcomes for two investment opportunities; Opportunity A in red and Opportunity B in blue. Which opportunity has the lowest risk? Which has the highest expected payoff? OA. B has the lowest risk, but A has the highest expected payoff OB. A has the lowest risk and highest expected payoff OC. A has the lowest risk, but B has the highest expected payoff D. B has the lowest risk, and both have the same expected payoff. OE B has the lowest risk and highest expected payoff OF. A has the lowest risk, and both have the same expected payoff.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The graph to the right shows the distribution of outcomes for two investment opportunities; Opportunity A in red and Opportunity B in blue. Which opportunity has the lowest risk? Which has the highest expected payoff? A. B has the lowest risk and highest expected payoff. B. B has the lowest risk, but A has the highest expected payoff. C. A has the lowest risk and highest expected payoff. D. B has the lowest risk, and both have the same expected payoff. ○ E. A has the lowest risk, and both have the same expected payoff. OF. A has the lowest risk, but B has the highest expected payoff. Probability Opportunity B Opportunity A 500 1000 1500 2000 Payoff ($)
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For the following questions consider this setting. The deciding shot in a soccer game comes down to a penalty shot. If the goal-keeper jumps in one corner and the striker shots the ball in the other, then it is a goal. If the goalie jumps left and the striker shoots left, then it is a goal with probability 1/3. If the goalie jumps right and the striker shots right, it is goal with probability 2/3. QUESTION Say the goalie's strategy is to jump left with probability 1 and the striker shoots left with probability 0.5, then the probability of a goal is (round to two digits) QUESTION If the striker shoots in either corner with probability 0.5 and the goalie likewise shoots in either corner with probability 0.5, then the probability of a goal is (round to 2 digits)