When facing a 50% chance of receiving $50 and a 50% chance of receiving $100, the individual pictured in Figure 5.2
A) would pay a risk premium of 10 utils to avoid facing the two outcomes.
B) would want to be paid a risk premium of 10 utils to give up the opportunity of facing the two outcomes.
C) would pay a risk premium of $7.50 to avoid facing the two outcomes.
D) would want to be paid a risk premium of $7.50 to avoid facing the two outcomes.
E) has a risk premium of 10 utils.
C
Economics
You might also like to view...
Opportunity cost means the
A) accounting cost minus the marginal cost. B) highest-valued alternative forgone. C) accounting cost minus the marginal benefit. D) monetary costs of an activity.
Economics
Capital refers to an inventory or a stock of productive equipment and machines.
Answer the following statement true (T) or false (F)
Economics