Author Question: Consider the Matching Pennies game: Player B - heads Player B - tails Player A - heads 1, -1 -1, ... (Read 544 times)

audragclark · **on:** Jul 1, 2018

Consider the Matching Pennies game:

Player B - heads Player B - tails
Player A - heads 1, -1 -1, 1
Player A - tails -1, 1 1, -1

Suppose Player B always uses a mixed strategy with probability of 3/4 for head and 1/4 for tails. Which of the following strategies for Player A provides the highest expected payoff?
A) Mixed strategy with probability 1/4 on heads and 3/4 on tails
B) Mixed strategy with probability 1/2 on heads and 1/2 on tails
C) Mixed strategy with probability 3/4 on heads and 1/4 on tails
D) Pure strategy in which Player A always selects heads

Question 2

If the payment stream of a bond remains the same and the price of the bond goes down, the

A) effective yield is unchanged.
B) effective yield rises.
C) effective yield decreases.
D) bond is reissued to reflect the higher interest rate.
E) bond is reissued to reflect the lower interest rate.