The Risk Premium of a Gamble Is Defined As

Multiple Choice

The risk premium of a gamble is defined as:

A) The difference between the expected value of the gamble and the Certainty Equivalent; the amount you are willing to forego to avoid the gamble.
B) The amount of money that makes an individual indifferent between receiving that amount for certain and taking on the gamble.
C) The difference between the expected value of the gamble and the expected utility of the game.
D) The initial endowment you started with prior to being faced with the gamble.