Goldman Sachs DeckHard

Brainteaser: I flip two fair coins. If both land heads you win $10; otherwise you pay me $3. Do you play?

Model answer

Work it aloud in this order — probability, payoffs, expected value, decision. P(both heads) = 1/2 x 1/2 = 1/4. EV = (1/4)(+$10) + (3/4)(-$3) = $2.50 - $2.25 = +$0.25, so a risk-neutral player takes…

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