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Natasha Is Going to Buy a Risky Asset That Has

Question 112

Multiple Choice

Natasha is going to buy a risky asset that has an expected value of $62, which yields an expected utility of 146. Equivalently, she could get utility of 146 from a certainty equivalent of $43. What is Natasha's risk premium?


A) $19
B) $43
C) $103
D) $105

Correct Answer:

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