Multiple Choice
An individual is uncertain whether to bet on a football game. He believes that the probability of his team winning is 40%. If his team wins, he will receive $180. If his team loses, he'll pay $120. If the decision is based on the expected value criterion, then the individual will:
A) not take the bet if he is risk loving.
B) be indifferent to the bet if he is risk-neutral.
C) take the bet only if he is risk averse.
D) not take the bet if he is risk averse.
E) Answers b and d are both correct.
Correct Answer:
Verified
Correct Answer:
Verified
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