You have been given the choice of receiving $500 in cash or receiving a gold coin that

Question:

You have been given the choice of receiving $500 in cash or receiving a gold coin that has a of $100. However, the actual value of the gold coin depends on its gold content. You are told that the coin has a 40% probability of being worth $400, a 30% probability of being worth $900, and a 30% probability of being worth its Basing your decision on expected value, should you choose the coin?

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...