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The Two Envelopes Paradox

Puzzle: You have two envelopes, each with money. One has twice as much as the other. You pick one and see $100. You can switch or keep. Should you switch?

Answer: There’s no advantage to switching. The expected value doesn’t change because if you switch, there’s an equal chance of doubling or halving your amount. The paradox challenges our intuitive grasp of probability.

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