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A Decision-Maker Is Faced with a Choice Between a Lottery

Question 17

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 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 ,what is the risk premium associated with this choice?


A) $0
B) $1
C) $2
D) $3

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