-please explain the answer Your friend has offered you two options: roll a six-sided die and...
-please explain the answer
Your friend has offered you two options: roll a six-sided die and win a prize, or take $3 and risk nothing. Each number on the die corresponds to a dollar amount: 1 = $1, 2 = $2, and so on. If you take the $3 with no gamble, you are
Choose one:
A. risk neutral.
B. risk averse.
C. a risk taker.
Homework Answers
Answer : The answer is option B.
Here taking $3 means that the risk is nothing. If I take a six-sided die to win then there exists risk. Here I am taking $3 which indicates that I am risk averse. Therefore, option B is correct.
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-please explain the answer
Your friend has offered you two options: roll a six-sided die
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