What term best describes the payment which must be offered to a risk-averse individual to willingly accept a gamble?
A)Certainty equivalent
B)Risk equivalent
C)Risk premium
D)Risk preference payment
E)Certainty payment

Question

Quizplus · Accepted Answer

The certainty equivalent is the guaranteed amount of money that a risk-averse individual would accept instead of taking a gamble with a higher expected value.

What Term Best Describes the Payment Which Must Be Offered