Consider a person, let's call her Nancy, who faces that kind of gamble. Assume she has the following characteristics: $80,000 annual income A 1% chance of having $75,000 in medical expenditures, leaving $5,000 to spend elsewhere (we'll call this the sick state (S)) A 99% chance of $100 in medical expenditures, leaving $79,900 (we'll call this the healthy state (H)) From the last module, you know how to calculate the Expected Value of the gamble Nancy faces. E(V) = PB(payoutB) pG(payoutG) The formula for this calculation is: E(V) = w*X y*Z Where w, X, y, and Z are: Question 1 options: 0.01, 80000, 0.99, 100 0.01, 5000, 0.99, 79900 0.1, 75000, 0.99, 80000 0.1, 5000, 0.9, 100