>would you rather have a 5% chance to earn 1 million dollars, or a 4% chance to earn 1 billion dollars?This is a classic probability and risk assessment question! Here's a breakdown to help you decide:
Option 1: 5% chance to earn $1 million
Potential Gain: $1 million
Probability: 5% (1/20)
Expected Value: 0.05 * $1,000,000 = $50,000
Option 2: 4% chance to earn $1 billion
Potential Gain: $1 billion
Probability: 4% (1/25)
Expected Value: 0.04 * $1,000,000,000 = $40,000,000
Based on Expected Value:
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