Calculate expected payout and talk about risk behavoir

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Calculate Expected payout and talk about risk behavoir

Suppose 20 balls are placed in a bag. 10 balls are red, 9 balls are yellow and 1 ball is green. If you draw a red ball you must pay $10. If you draw a yellow ball you get $2. If you draw the green ball you get $100. Find the expected payout of this game and tell me if you are willing to play it. What does this say about preference for risk?

Reference no: EM13739499

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