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Goldie Is Indifferent Between Option A, Which Gives Her $9,000

Question 175

Multiple Choice

Goldie is indifferent between option A, which gives her $9,000 for sure, and option B, which gives her $3,000 with probability 1/3 or $18,000 with probability 2/3. Goldie's cost of risk for option B is


A) zero.
B) $1,000.
C) $3,000.
D) $4,000.

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