Suppose you won the lottery and had two options: (1) receiving $0.7 million or (2) taking a gamble in which, at the flip of a coin, you receive $1.4 million if a head comes up but receive zero if a tail comes up.

What is the expected value of the gamble? Enter your answer in millions. For example, an answer of $500,000 should be entered as 0.5. Round your answer to one decimal place.

$ million

Would you take the sure $0.7 million or the gamble?

-Select-Take $0.7 millionTake the gambleItem 2

If you chose the sure $0.7 million, would that indicate that you are a risk averter or a risk seeker?

-Select-Risk averterRisk seekerItem 3

Suppose the payoff was actually $0.7 millionthat was the only choice. You now face the choice of investing it in a U.S. Treasury bond that will return $742,000 at the end of a year or a common stock that has a 50-50 chance of being worthless or worth $1,540,000 at the end of the year.