Q1. Agents A, B and C are offered the opportunity to play a (fair) coin toss game with the following rules:

To win a $5 million payout the agent must correctly call three consecutive fair coin tosses. However, a guaranteed payment offer is made to A, B, and C before each coin toss.

Game 1) A is offered a $250k payment before the first coin toss and chooses to take the $250k payment.

Game 2) B is offered a $250k payment before the first coin toss. B elects to call the first coin toss and wins the toss. B is then offered and accepts a $1million payment before the second coin toss.

Game 3) C is offered a $250k payment before the first coin toss. C elects to call the first coin toss and wins the toss. C is then offered a $1.25 million payment before second coin toss. C elects to call the second coin toss and wins the toss. C is then offered $3 million payment before third coin toss.

Would you expect C take the $3 million payment or call the third coin toss? Explain your rationale behind your expectation.

What can be inferred about A's, B's and C's risk preferences (tolerances)?

Show table of calculations utilized to explain and support your inferences.