Jane StreetTrader InternQuantitative Trader InternQuestion #489

You have two indistinguishable urns. One contains seven $1 chips and three $10 chips, and the other contains nine $1 chips and one $10 chip. You randomly draw a chip from one of the urns and it turns out to be a $10 chip (the drawn chip is not replaced). You are then offered the chance to draw and keep a chip from either urn. Should you draw from the same urn or the other urn, and what is the expected value of your draw? Explain your reasoning.

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