Exam 1

1. Metainformation

   Tag	Value
   file	Probability_uva-expected-value-1139-en_uva-expected-value-1139-en
   name	uva-expected-value-1139-en
   section	Probability/Elementary Probability/Random variables/Expected value
   type	schoice
   solution	TRUE, FALSE
   Type	Conceptual
   Language	English
   Level	Statistical Literacy
   IRT-Difficulty	0.451
   p-value	0.9092

   Question

   Daan pays €5 a year for device insurance. He thinks that the probability is 0.1 that in the coming year the device will need to be needs to be repaired, and the probability of more than one repair is then 0. A repair costs €100 if he does not take insurance, and costs nothing if he does take insurance. Should Daan take insurance if he acting rationally?

   
   
   1. TRUE: Yes
   2. FALSE: No
   
   
   1. Yes: Correct
   2. No: Incorrect