You're a contestant on a TV game show. In the final round of the game, if...

You're a contestant on a TV game show. In the final round of the game, if contestants answer a question correctly, they will increase their current winnings of $1 million to $2 million. If they are wrong, their prize is decreased to $500,000. You believe you have a 10% chance of answering the question correctly. Ignoring your current winnings, your expected payoff from playing the final round of the game show is $...... . Given that this is Negetive or Positive? , you Should not or Should? play the final round of the game. (Hint: Enter a negative sign if the expected payoff is negative.) The lowest probability of a correct guess that would make the guessing in the final round profitable (in expected value) is ...... (Hint: At what probability does playing the final round yield an expected value of zero?)

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Rahul Sunny answered 1 year ago

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