Question

You have gotten tired of working for a living and have taken a brainwave to buy a salvage vessel, cruise to Bermuda, and dive for sunken treasure to become rich. The cost of the vessel, diving gear, a crew, and insurance against "the bends" is $200,000. But the potential payoff is huge: $2 million if you actually find and recover the treasure. Now historically, only 1 out of every 20 treasure hunters like you has ever hit pay dirt.1) Should you invest in diving for treasure, or suck it up and go back to your regular job?2) What is the expected value of Perfect Information on whether there is treasure or not?

Answer 1

1. I don't think the risk is worth taking because of the risks involved in the treasure hunt is High. so you just such it up and continue your regular job, because there is no full assurance that the treasure even exists.

2. The expected value of perfect information ill be given by
`(1)/(20) =0.05`.

Step-by-step explanation:

By the above perfect information on whether the treasure is real or not the chance of success is very slim, so it can easy go sideways for you, and making you lose your job at the same time while at the process of looking for a treasure you might not find probably.