Multiple Choice
Refer to the information provided in Figure 17.2 below to answer the question(s) that follow. Figure 17.2
-Refer to Figure 17.2. Fiona has two job offers when she graduates from college. Fiona views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $60,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $80,000. Fiona believes that she has a 50-50 chance of earning the bonus. If Fiona takes the offer that maximizes her expected utility and she is risk-neutral, then
A) she will take the first offer.
B) she will take the second offer.
C) she is indifferent between the offers-both yield the same expected utility.
D) Indeterminate from the given information-we cannot say what she will do.
Correct Answer:

Verified
Correct Answer:
Verified
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