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You have been given an offer to create a commercial featuring a doctor character that supports the claim that having health insurance shortens one's life
You have been given an offer to create a commercial featuring a doctor character that supports the claim that having health insurance shortens one's life expectancy by up to 10 years. Your cost to hire the actor and create a set is $1,000. If you get this done in one week, youll get paid $6,000. If you get it done in three days, youll get paid $11,000. If it takes longer than a week it's no good and you wont be paid. Thus, you have three possible outcomes-- profit of $5,000, profit of $10,000, or lose $1,000). Your probabilities are the same at 1/3. Before you decide to take on this project you would like would like to conduct a sensitivity analysis looking at what happens if each probability could range from 0 to 0.5. A) Use a Monte Carlo simulation to perform a sensitivity analysis of the probabilities of the payoff. B) Suppose you would like to choose each of the three probabilities from a uniform distribution between 0 and 1. Can this information be worked into your simulation? If so, how? If not, explain why not, or what additional information you would need
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