Exhibit 14.7 The Following Questions Use the Information Below

Multiple Choice

Exhibit 14.7
The following questions use the information below.
A decision maker is faced with two alternatives. The decision maker has determined that she is indifferent between the two alternatives when p = 0.45.
-Refer to Exhibit 14.7. What is the decision maker's risk premium for this problem?

A) −$20,000
B) −$25,900
C) $70,000
D) $80,000