Mohammmad bin mustari / BB17110188

Question 1 (10 marks),

1) If there is $100 to distribute, then everyone get an equal. That is everyone get
$33.33.
2) if there is $200 to distribute, then the first creditor get $50,while other two get
$75 each.
3) If there is $300 to distribute, then the first creditor get $50, the second get get
$100, and the third get $150

Question 2 (10 Marks),

POPULATION CORRECTLY IDENTIFIE
90% -WHITE MAN 20% - WHITE MAN
10% - BLACK MAN 80% - BLACK MAN

White skin man 90% Black skin man 20%

Correct wrong Correct wrong

90% of 80% =72% 20% of 90% =18% 10% of 80% = 8% 10% of 20%=2%
0.90 x0.80 =0.72 0.20 x 0.90 =0.18 0.1 x 0.8 =0.08 0.1 x 0.2= 0.02
If white skin man ,72% + 2% =74% If black skin man , 8% + 18% =26%

Probability , 72% / 74% = 97% Prbability , 8% /26% = 31%

Question 3 (10 Marks)

Situation 1
Sure gain, $50(100%) - expected value $ 50
Possible gain ,$100 (50%) - expected value ($100x0.5 +($0 x 0.5)) =$50
Neutral , $0 (50%)-

With option 1,i assured to $50 for sure gain ,while with option 2, there’s a 50% chance you
could get $50 or nothing.In the situation 1 I will choose option A this because to avoid the
risk and take $50 for sure gain .
Situation 2

sure gain, $50(100%) - expected value - $ 50

Possible gain ,$100 (50%) - expected value ($100x0.5 +($0 x 0.5)) = -$50
Neutral , $0 (50%)-
With option 1, I assured to lose $50 and with option 2 i have 50 % chance of losing either
$50 or nothing – $0. I would prefer the option B. This because  when aiming to avoid losses,
we become risk seeking and take the gamble over a sure loss, in the hope of losing nothing.