(Choose 1 answer)
(15997) Suppose one is offered a gamble in which you win $1,000 half the time but lose $1,000 half the time. Since in this case one is as likely to win as to lose the $1,000, the average payoff on this gamble its expected value is:
0.5 * $1,000+ 0.5 * (-$1,000) = 0.
Under such circumstances:
A. risk averse individuals will take the gamble.
B. no one will take the gamble.
C. risk lovers individuals will not take the gamble.
D. risk lovers and risk neutral individuals may take the gamble.
E. risk neutral individuals will not take the gamble
wi
Exit 39
