Multiple Choice
A decision-maker is faced with a choice between a lottery with a 30% chance of a payoff of $30 and a 70% chance of a payoff of $80, and a guaranteed payoff of $65. If the decision maker's utility function is , what is the risk premium associated with this choice?
A) $0
B) $1
C) $2
D) $3
Correct Answer:
Verified
Correct Answer:
Verified
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