What must the jackpot be before the expected payoff

Assignment Help Econometrics
Reference no: EM131048006

Tennessee just instituted a state lottery. The initial jackpot is $100,000. If the first week yields no winners, the next week's jackpot goes up, depending on the number of previous players who placed the $1 lottery bets. The probability of winning is one in a million (1.0 × 10-6). What must the jackpot be before the expected payoff is worth your $1 bet? Assume that the state takes 60% of the jackpot in taxes, that no one else is a winner, and that you are risk neutral (i.e., you value the lottery at its expected value).

Reference no: EM131048006

Questions Cloud

Insurance brokerage mergers and acquisitions : Why do insurance brokerage mergers and acquisitions have a greater influence on corporate risk managers than do property and casualty insurance company mergers and acquisitions?
Compute the profit consequences of the advice : Compute the profit consequences of the advice.
A risk manager self-insured a property risk : A risk manager self-insured a property risk for one year. The following year, even though no losses had occurred, the risk manager purchased property insurance to address the risk.
How does this affect the hr manager''s hiring decisions : How does this affect the HR manager's hiring decisions?
What must the jackpot be before the expected payoff : What must the jackpot be before the expected payoff
Integrated risk management programs : Integrated risk management programs are new to many risk managers and the insurance companies that offer such programs.
What price maximizes profits : Your dealings on the secondhand market lead you to believe that there is a 0.4 chance a random buyer will pay $300,000, a 0.25 chance the buyer will pay $350,000, a 0.1 chance the buyer will pay 400,000, and a 0.25 chance it will not sell. If you ..
Cohesiveness and relationships within an organization : Pay is stressed in several of the cases and some of the content in the reading. How much influence do pay differentials between employees at different levels have on commitment, cohesiveness and relationships within an organization?
Define the meaning of industrial robotics : The purpose of this course is to enable me to: learn about a versatile field of Industry Robotics to upgrade my skills in Electro-technology - define the meaning of Industrial Robotics

Reviews

Write a Review

Econometrics Questions & Answers

  What is the maximum amount the annuity can pay

A businessman wants to donate the funds to establish a new academic support program for student athletes. He is prepared to donate $10 million today (Feb. 16, 2012), one year hence (Feb. 16, 2013), and two years hence (Feb. 16, 2014) to establish

  Is acme currently employing the optimal amount of capital

Acme Container Company produces egg containers that are sold to egg distributors using capital and labor. At Acme the marginal product of labor is: MPL=15 while the marginal product of capital is: MPK=10. Workers at Acme earn $10 hour (w=$10), whi..

  Calculate the break-even point for the project

Identify and list the various costs-fixed and variable, direct and indirect-required to execute the project.

  Explain who has the same preferences as jim

Jim's utility function is U(x, y) = xy. Jerry's utility function is U(x, y) = 1,000xy + 2,000. Tammy's utility function is U(x, y) = xy(1 - xy). Oral's utility function is U(x,y)= -1/(10+2xy).Marjoe's utility function is U(x, y) = x(y + 1,000). Pa..

  What is the payoff amount

You got a loan for $1,000,000. It is a 30 year loan, but you are going to pay it off in 15 years. The APR is 8% and you make annual payments off $88,827,43. The Salvage value at year 15 is $300,000. What is the payoff amount

  Explain stakeholder benefits and possible risks

Explain stakeholder benefits and possible risks associated with both models.

  1 suppose z follows a standard normal distribution ie a

1. suppose z follows a standard normal distribution i.e. a normal distribution with mean 0 and variance 1.a. what is

  How the intermediaries come from a competitive market

Now assume that intermediaries come from a competitive market with an equilibrium price of $8 per unit for their services, that is, any buyer or seller who wants an intermediary's services must pay $8 for them. What is the maximum per unit that se..

  The supply curve for product x is given by qxs -520 20px

the supply curve for product x is given by qxs -520 20px .a. find the inverse supply curve.p qb. how much surplus

  Does longland experience diminishing returns

For three years, there was no technological change in Longland but capital per hour of labor increased from $10 to $20 to $30 and real GDP per hour of labor increased from $3.80 to $5.70 to $7.13. Then, in the fourth year, capital per hour of labo..

  Find v- nominal gdp

calculate the V(gdp) using the velocity formula.  All given is a LRAS graph with the following information derived from the graph Real GDP = 9 trillion and Price level = 3; Furthermore The AD line intercepts the x axis at 18 trillion and the y axis ..

  What is the minimum value per hour placed on ones time

The state highway route has a 30% chance of taking 4 hours, a 50% chance of taking 5 hours, and a 20% chance of taking 6 hours. All other factors being the same, people who place a higher valueon time.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd