Question
You pay $10 to play a coin toss game with a special coin. The payoffs are shown in the table below: Probability Payoff Head 40%
You pay $10 to play a coin toss game with a special coin. The payoffs are shown in the table below:
Probability Payoff
Head
40% $30
Tail
60%. $0
What is the expected return from this game?
What is the standard deviation of this game's return? (Hint: calculate the return when you have a head and the return when you get a tail first.)
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Basic Finance An Introduction to Financial Institutions, Investments and Management
Authors: Herbert B. Mayo
11th Edition
1285425790, 1285425795, 9781305464988 , 978-1285425795
