Jimmy's utility of wealth schedule is given in the table above. Jimmy has a job with a one-third chance of earning $200 and a two-thirds chance of earnings $400. Jimmy's cost of risk is
A) $0.
B) $16.67.
C) $33.33.
D) Jimmy's cost of risk cannot be determined without more information.
C
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Which of the following is not one of the key services provided by the financial system?
A) risk sharing B) liquidity C) decreasing taxes D) generating information
The direct effect of an increase in the money supply is
A) people will spend the extra money, causing the aggregate demand curve to shift to the right and prices to rise, and causing the economy to go into recession. B) people will save the money, causing an increase in bank deposits, causing interest rates to fall, and loans to expand. C) people will save more money, causing a decrease in economic activity and a fall in prices. D) people will spend the extra money, causing the aggregate demand curve to shift to the right, creating an increase in economic activity.