-Bobby Is Offered a Job as a Salesperson in Which

Multiple Choice

-Bobby is offered a job as a salesperson in which there is a 50 percent chance that he will make $2,000 and a 50 percent chance that he will make $10,000. Bobby's utility of wealth curve is shown in the figure above. What is Bobby's cost of risk?

A) $1,000
B) $2,000
C) $3,000
D) $4,000