Calculate the expected value for each option. Then decide which option has a greater expected value:
• Option 1: You have a 40% change of winning $500 and a 60% chance of winning $1000.
• Option 2: You have a 70% chance of winning $1500 and a 30% chance of losing $200.
a) The expected value for Option 1 is $
b) The expected value for Option 2 is $
c) Which has the greater expected value?
-Option 1 has the greater expected value.
-Option 2 has the greater expected value.
- Both options have the same expected value.