Decision Alternatives
Dear Tutors, please, pick one of the following questions:
Question 1:
Many times it will have the various levels of payouts and the probability of each. You can use these to calculate an expected value!
Give this a try with a lottery ticket. If you don’t happen to have one lying around, you can find samples online. For example,
https://www.palottery.state.pa.us/Games/
has a list of lotteries. Choose one and then click on the Prizes and Chances link above the “How to Play” tab. Some of the lotteries will have payouts and probabilities, some will not, so you will have to search through the list. Many other states will have sites like this too.
I look forward to seeing your payouts, probabilities, and the resulting expected value! Be sure to give the name of the lottery and a description if available.
Question 2:
We have hinted that the standard deviation can be used to assess some of the risk in the market. Have you ever looked at Bollinger Bands? Do these use standard deviation?
