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Steven is watching an old game show rerun on television called Let's Make a Deal in which the contestant chooses a prize behind one of two curtains

Finance Nov 24, 2020

Steven is watching an old game show rerun on television called Let's Make a Deal in which the contestant chooses a prize behind one of two curtains. Behind one of the curtains is a gag prize worth $60, and behind the other is a round-the-world trip worth $4,900. The producer of the game show has placed a subliminal message on the curtain containing the gag prize, which makes the probability of choosing the gag prize equal to 75 percent. (a1) X Your answer is incorrect. What is the expected value of the selection? (Round answer to 2 decimal places, e.g. 15.25.) Expected value $ 3003.71

Expert Solution

Prize Worth × Probability Value
Gag prize 60 75% 45
Round world 4900 25% 1225
Expected value   1270

Answer is:

1270

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