Question
Sandhill made a friendly wager with a colleague that involves the result from flipping a coin. If heads comes up, Sandhill must pay her colleague
Sandhill made a friendly wager with a colleague that involves the result from flipping a coin. If heads comes up, Sandhill must pay her colleague $17; otherwise, her colleague will pay Sandhill $17. What is Sandhills expected cash flow, and what is the variance of that cash flow if the coin has an equal probability of coming up heads or tails? (Round answers to 2 decimal places, e.g. 52.75.)
Expected cash flow | $enter a dollar amount rounded to 2 decimal places | |
---|---|---|
Cash flow variance | enter the variance rounded to 2 decimal places |
Suppose Sandhills colleague is willing to handicap the bet by paying her $22 if the coin toss results in tails. If everything else remains the same, what are Sandhills expected cash flow and the variance of that cash flow?
Expected cash flow | $enter a dollar amount rounded to 2 decimal places | |
---|---|---|
Cash flow variance | enter the variance rounded to 2 decimal places |
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