Allison

Mathematics

24 August, 04:24

Suppose you are considering making an investment. You have a chance to make an investment that will return either $50,000 or $100,000. Your financial advisor estimates that the probability of receiving $50,000 is 50% and the probability of receiving $100,000 is also 50%. You also learn from your financial advisor that shares in this investment are limited and difficult to obtain. Therefore, the less you are willing to invest, the lower the chance that you will be able to participate in the investment. Based on this information, what is the largest amount of money you would be willing to pay to participate in this investment, assuming you had the money?

A) $70,711

B) $66,667

C) $63,246

D) $60,571

E) $58,566

F) $57,083

G) $55,978

H) $55,143

I) $54,499

J) $53,991