Lotteries a and B Have the Same Expected Value, but B

Multiple Choice

Lotteries A and B have the same expected value, but B has larger variance. Which of the following statements is true, all else equal?

A) If the decision maker is risk averse, lottery A will have the larger risk premium.
B) If the decision maker is risk neutral, lottery B will have the larger risk premium.
C) If the decision maker is risk loving, both lotteries will have a positive risk premium.
D) If the decision maker is risk averse, lottery B will have the larger risk premium.