Discussion in 'Psychology' started by traderich, Dec 8, 2005.
Would you go for it or not?
What made you chose 32k/64k rather than another figure?
my EV is well worth it....of course 32k is a good chunk of change!
if it was risking 500k to win 1 million on a 50/50 I would probrably say no though.
This is a good question and the results would certainly change based on the amount of money at risk!
I can't imagine anyone with half a brain would actually keep $1 if they could get $2 on a 50/50 guess! but...ya never know!
Let me explain the way the game "Who Wants to Be a Millionaire" in case you forgot or never saw the show.
You answer questions and win money. If you answer 10 questions correctly, you are assured $32,000. The 11th question is worth $64,000, but you are actually not risking losing any money because even if you get it wrong you still win the $32,000, so that question is a gimme.
The 12th question however can be tougher. If you answer the 11th question, you now have won $64,000 and are asked a question worth $125,000.
You start with 4 choices, but assuming for argument sake, you still had your 50/50 option and use it bringing your choices down to 2.
Assume you have absolutely no idea what the correct answer is, so it is a total guess.
You now have to decide if its worth risking your $32,000 to win $64,000 and of course the chance at even more money on the next questions (but we will forget that part for now!)
ok, now you got the jist of it. Risk losing $32,000 and leave with only $32,000 instead of $64,000 OR....take a 50/50 guess and try to have $125,000.
What would you do and why??
the risk reward is not 1/1, its 1/2
you risk 1 to win 2
I misunderstood, so if I win, I actually net out 32k+64k = 98k? Thats a 1/2 risk to reward.
If that's the case then we have a differrent game. If that's not the case then I'm risking 32k to make 32k, which leaves me with 64k - a 1/1 risk to reward.
read my post about the game and how it works before posting your answer please.
In the game you have $64,000....if you answer incorrectly, you leave with $32,000. However, if you answer correctly, you will now have $125,000.
So, you are risking $32,000 of the $64,000 you have to potentially win $64,000.
Okay, thanks for a better explanation. You are risking 32k to make 64k, so your net balance will be 128k if you win. You are right the R/R is 1/2 and you are risking 50% of your capital for it.
I take back my answer, I would take those odds.
Sorry for the confusion, I can be very dense sometimes
Would you risk 32k to win 64k on a 50/50 guess?
This is not a serious question.
The definitive answer for traders is from Gordon Gekko:
"I don't throw darts. I bet on sure things."
the only sure things in life 'cheese' are death and taxes!
The next best thing to a sure bet are horseshoes and hand grenades!
anything else has to account for some risk...and if I could flip a coin a ga-zillion times and risk a dollar to win 2 dollars, I'd have all the money in the universe...
I am amazed at how stupid some people really are on this planet.
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