Multiple Choice
Which of the following statements is incorrect?
A) A risk-averse decision maker will choose the alternative with the lowest variance among alternatives with identical expected utilities.
B) A risk-neutral decision maker will always choose the alternative with the lowest variance among alternatives with identical expected utilities.
C) A risk-loving decision maker will choose the alternative with the highest variance among alternatives with identical expected utilities.
D) The expected utility of a lottery is the expected value of the utility levels that the decision maker receives from the payoffs in the lottery.
Correct Answer:
Verified
Correct Answer:
Verified
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