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← 05-23 Break Even Point

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Showing Revision 1 created 05/13/2012 by Amara Bot.

  1. So now I want to ask you a question.
  2. So given this quality function Q,
  3. and assuming that our utility function
  4. is the log function,
  5. since we saw that for some values of this state
  6. the best action--
  7. the action with the highest quality is 'hold'
  8. and other values is 'gamble,'
  9. there must be a point at which there is a crossover--
  10. where the two values are approximately equal.
  11. So what I want you to tell me is:
  12. to the nearest million, what is that crossover point C?
  13. That value of state--
  14. that value of the amount of money that I currently have
  15. to say that I'm indifferent between the 2--
  16. that if I have C dollars, then my quality for gambling
  17. is the same or approximately the same
  18. as my value for holding.
  19. What value of C to the nearest million is that true of?
  20. And just to make it easier for those who can't divide by e in your head,
  21. we'll use the log10 logarithms rather than the natural logarithms
  22. so that the log10 logarithm of a million is 6.
  23. Tell me what the crossover point is to the nearest million.