A "psychic" runs the following ad in a magazine: Expecting a baby? Renowned psychic will tell you the sex of the unborn child from any photograph of the mother. Cost is $ 60. If the psychic guesses right he or she is going to keep all the money. But if psychic does not guess right he or she promises to give the $50 back and pay in addition $20 out of her pocket as a compensation for the wrong answer. Assume postage fees for the return mail are $1. Also assume that the probability of having a boy is 51% and the probability of having a girl is 0.49%.

Suppose that the psychic simply replies "girl" to all inquiries. Assume that everyone who has a boy will ask for her money back. Use the expected value equation to estimate the expected profit per inquiry.

A "psychic" runs the following ad in a magazine: Expecting a baby? Renowned psychic will tell you the sex of the unborn child from any photograph of the mother. Cost is $ 60. If the psychic guesses right he or she is going to keep all the money. But if psychic does not guess right he or she promises to give the $60 back and pay in addition $20 out of her pocket as a compensation for the wrong answer. Assume postage fees for the return mail are $1. Also assume that the probability of having a boy is 51% and the probability of having a girl is 0.49%.

Suppose that the psychic simply replies "girl" to all inquiries. Assume that everyone who has a boy will ask for her money back. Use the expected value equation to estimate the expected profit per inquiry.

ANSWER OPTIONS:

16.27

17.84

18.03

18.69

19.03

20.29