Option a Has an Expected Value of $2,000, a Minimum

Multiple Choice

Option A has an expected value of $2,000, a minimum payoff of −$4,000, and a maximum payoff of $18,000. Option B has an expected value of $2,200, a minimum payoff of −$1,000, and a maximum payoff of $6,000. Option C has an expected value of $1,900, a minimum payoff of $100, and a maximum payoff of $2,000. In this situation, a risk-averse decision maker would pay __________ for his risk aversion, and a risk-seeking decision maker would pay __________ for his risk seeking.

A) $200; $300
B) $1,100; $5,000
C) $300; $200
D) $2,100; $16,000
E) $400; $200