Which of the Following Statements Is Correct for a Decision

Multiple Choice

Which of the following statements is correct for a decision maker facing a choice between a sure thing and a lottery when the sure thing has the expected payoff of the lottery?

A) Risk-loving decision makers will require a positive risk premium to bear risk.
B) Risk-neutral decision makers will require a positive risk premium to bear risk.
C) Risk-averse decision makers will require a positive risk premium to bear risk.
D) The risk premium depends on the characteristics of the lottery, not on the characteristics of the utility function of the decision maker.