The EMV that a person is willing to give up in order to avoid the risk associated with a gamble is referred to as the ________.
A)risk premium
B)certainty equivalent
C)EVPI
D)EVwPI
E)EVSI

Question

Quizplus · Accepted Answer

The risk premium is the amount a person is willing to pay to avoid risk, which is the difference between the expected monetary value (EMV) of a gamble and the certainty equivalent.

The EMV That a Person Is Willing to Give Up